Meta plans $95bn stock offering to bankroll AI expansion

Meta Platforms announced on Monday its intention to raise up to $95 billion in equity funding to support its aggressive expansion in AI-related infrastructure, including data centers and cloud computing. The company initiated public offerings of approximately $35 billion in common stock and convertible preferred stock. Additionally, Meta intends to launch a separate at-the-market share sale program, potentially amounting to $60 billion, once its new non-voting Class C shares commence trading, likely in the first quarter of 2027.

The social media giant has intensified its investments in data centers, computational resources, and AI-driven products to compete with leading AI firms like OpenAI and Anthropic. As of September 30, Meta held $82.45 billion in cash, cash equivalents, and marketable securities, slightly surpassing its long-term debt of $80.92 billion.

The company has pledged to spend around $825 billion in the future, primarily due to its escalating investments in data centers, AI infrastructure, and cloud computing capabilities. Notably, Nvidia, Advanced Micro Devices, and Broadcom have shown interest in acquiring up to $5 billion of Meta’s Class A common stock through the offering.

Earlier this week, Meta adjusted its annual spending forecast upwards, now anticipating capital expenditures to range between $135 billion and $145 billion in the current year, a notable increase from the previous estimate of $130 billion to $145 billion. In the third quarter, Meta reported a cash burn of $2.12 billion, marking its first instance of negative free cash flow in over a decade, contrasting with a positive cash flow of $10.63 billion the previous year.

The social media corporation generated $64.60 billion in revenue during Q3, exceeding market expectations of $63.37 billion. It further projected fourth-quarter revenue to fall within the range of $73 billion and $76 billion.