Meta Plans $95bn Stock Sale to Fund Its AI Spending
Meta said it will raise $35bn in underwritten offerings and sell up to $60bn of new class C shares over time, as Elon Musk warned about neocloud funding.
Meta has announced a $95bn (£71bn) fundraising to cover its spending on artificial intelligence. The company behind Facebook, Instagram and WhatsApp is one of the biggest investors in the field and is putting multibillion-dollar sums into datacentres.
The plan has two parts. The first is a $35bn round of underwritten public offerings, which means a sale of company stock. Meta said the chipmakers Nvidia, AMD and Broadcom have all shown interest in taking part. As "cornerstone investors", they could buy up to $5bn of the shares on offer.
The second part is a $60bn "at-the-market offering". Meta would sell new common stock at the going market price in the future. The shares are the new class C stock that the company said last week it was creating. Class C shares carry no voting rights, so selling them does not dilute Mark Zuckerberg's control of the company.
Meta said the money would support its "continued investment in AI infrastructure and personal super intelligence". Its shares rose in premarket trading on the news.
Musk on "neocloud" funding
The announcement came a day after Elon Musk said on X that debt markets have "almost entirely shut off access to money" for any company without substantial revenue independent of AI datacentres. He predicted that the 200-plus "neocloud" firms, which lease computing power to AI companies, would see "guppy-level death and consolidation". "Some will make it through, but not many," he wrote.
Shares in Nebius, CoreWeave and Iren fell more than 2% in premarket trading after his post, then rose once trading began. Worries about neoclouds centre on their heavy borrowing, about $35bn at CoreWeave, and on whether the AI market will grow fast enough to service it. CoreWeave's stock has lost more than a third of its value over the past month.
Neil Wilson, an analyst at the investment platform Saxo UK, said the different reactions showed investors were more willing to back the AI plans of financially robust companies. "Meta's not going to struggle to service debts and can lean on equity raises to minimise debt, too," he said.
SpaceX also reported on Monday that it had entered a $40bn deal with Apollo Global Management to lease chips for AI datacentres. CoreWeave's chief executive, Michael Intrator, reportedly told staff in an internal memo that markets sometimes misunderstand a new type of technology company and act irrationally, according to Bloomberg.
Source: The Guardian