Meta Platforms is ramping up its investment in artificial intelligence infrastructure, announcing an increase in its planned equity fundraising to $97.5 billion. This significant boost in funds is aimed at supporting developments in AI technologies, including the expansion of data centers, enhancements in chip technology, and increased computing capacity.
The company has adjusted its previous common stock offering, increasing it from $22.5 billion to $25 billion, with shares priced at $625 each. Additionally, Meta has priced 250 million depositary shares at $50 per share. A separate at-the-market share sale program is also in the works, potentially worth up to $60 billion, which will allow Meta to issue shares based on current market prices. Trading for Meta’s new non-voting Class C shares is anticipated to commence in the first quarter of 2027, although the exact details of the program are still being finalized.
Interest from the tech industry has been notable, with major chipmakers like Nvidia, Advanced Micro Devices, and Broadcom expressing potential investments that could total up to $5 billion. Notably, Nvidia has confirmed its intention to invest $3 billion in the offering. This development highlights the deepening financial ties between AI companies and the tech suppliers essential to their growth.
Despite these expansions, Meta’s financial health has been under pressure. The company reported a negative free cash flow of $2.12 billion in the third quarter, a stark contrast to the positive free cash flow of $10.63 billion reported in the same period the previous year. As of September 30, Meta held $82.45 billion in cash, cash equivalents, and marketable securities, while its long-term debt stood at $80.92 billion.
In response to the growing demands of its AI ventures, Meta has raised its annual capital expenditure forecast to between $135 billion and $145 billion. The company is betting on the increasing demand for AI products and the development of competitive AI models to yield profitable returns in the future. This strategic move underscores a larger trend among tech giants, who are increasingly leaning on equity and debt financing to meet the rising costs associated with AI infrastructure development.