tech
FT: Meta plans to issue shares worth tens of billions of dollars to fund AI
Meta's management is exploring "unconventional" ways to raise capital, necessary for a sharp increase in AI infrastructure costs, including issuing shares worth tens of billions of dollars, according to the Financial Times. This year, the company intends to spend up to $145 billion on it, and even more in 2027. It is noted that discussions intensified after Google's parent company, Alphabet, successfully conducted a record $85 billion share offering for itself, with the initial volume increased by $5 billion due to high investor demand.
TL;DR
- Meta is exploring "unconventional" ways to raise capital, such as issuing shares worth tens of billions of dollars, to fund its AI infrastructure costs.
- The company plans to spend up to $145 billion on AI infrastructure this year and more in 2027.
- Meta's discussions were spurred by Alphabet's successful $85 billion share offering.
- CFO Susan Li and President Dina Powell McCormick are leading the financing strategy reform.
- Meta is examining Alphabet's deal structure, which involved convertible preferred stock.
- Other tech companies like SpaceX, Anthropic, and OpenAI are also preparing for major stock offerings.
- Meta has increased its debt significantly and previously suspended share buybacks and laid off employees.
- Meta has a potential five-year deal worth up to $27 billion with Nebius for AI infrastructure usage.