Meta plans nonvoting shares, eyeing more stock sales to fund its AI dreams

Meta is set to unveil new non-voting shares of stock, according to sources familiar with the company's plans, indicating it may rely on additional share sales to finance its ambitious artificial intelligence (AI) initiatives. This announcement could potentially be made within the week, coinciding with Meta's quarterly earnings report release.

The introduction of these non-voting shares will enable Meta to issue new stock for various purposes, including acquisitions, recruiting top AI talent, and covering the high costs of AI technology, all while preserving Mark Zuckerberg's control over the company.

Notably, Alphabet, Google's parent company, implemented a similar strategy in 2014 with a 2-for-1 stock split that introduced both super-voting and non-voting shares. By doing so, the combined control of co-founders Larry Page and Sergey Brin remained slightly above 50%, allowing Alphabet to issue approximately $85 billion in new stock that year to fund AI investments. Of the new shares, half did not come with voting rights.

In the past, large technology firms have managed the impact of issuing new stock by repurchasing shares in the market. However, as the expenses associated with their AI investments have risen, these companies have put a halt on stock repurchases, leading them to become net issuers of shares. This shift in strategy could potentially result in a dilution of the stakes held by existing shareholders. A Meta spokesperson was not available for comment on the matter.