Meta launches $35 billion stock offering to fund AI expansion

Meta Platforms announced on October 26 its intention to raise up to US$95 billion through its largest-ever equity fundraising in history, driven by the company's aggressive investments in AI infrastructure. The social media giant, whose parent company is Facebook, has already launched public offerings worth approximately US$35 billion in common and preferred stock.

Additionally, Meta plans to introduce a separate at-the-market share sale program valued at up to US$60 billion, following the launch of new non-voting Class C shares in early 2027. The company has received interest from Nvidia, Advanced Micro Devices, and Broadcom, totaling an estimated US$5 billion for Class A shares. This substantial fundraising effort highlights a growing trend among major tech companies, who are increasingly turning to debt markets and equity to fund their AI expansion.

Earlier this year, Alphabet increased the size of its equity offerings to US$84.75 billion. SpaceX, in a separate development on October 26, secured an affiliate from Apollo Global Management to acquire AI chips and server hardware for its rockets-to-AI venture, with a principal payment of roughly US$40 billion. Mark Zuckerberg's Meta has pledged to invest around US$825 billion in the future, primarily focused on data centers, AI-related infrastructure, and cloud computing power.

However, this expansion has led to a negative cash flow of US$2.12 billion in the third quarter, the first such occurrence in over a decade. Despite these financial challenges, Meta's consumer-focused AI agent Muse and the release of new AI models have partially justified its aggressive investments, though some enterprises have limited Muse's access due to security concerns.

As of September 30, Meta held US$82.45 billion in cash, cash equivalents, and marketable securities, while owing US$80.92 billion in long-term debt. Last week, Meta revised its annual capital expenditure forecast upward to a range of US$135 billion to US$145 billion, following its previous outlook of between US$130 billion and US$145 billion.

To fund these investments and retain top talent, the company plans to issue Class C common stock in January 2027, effectively resulting in a two-for-one stock split, ensuring Mark Zuckerberg's control and California residency despite potential billionaire wealth taxes.