Mark Zuckerberg increases capital expenditures for Meta as the company faces scrutiny over AI profitability.
Mark Zuckerberg announced that Meta is raising its capital expenditures from $125 billion to at least $130 billion to fuel its aggressive expansion into artificial intelligence. Despite this massive investment, the company's shares plummeted over 11 percent in five days following the announcement, as investors expressed concern over the lack of clear profitability from the expensive data centers. While Zuckerberg stated that the extra spending is accelerating core business functions, Meta's free cash flow dropped 91 percent from the previous year. Analysts have compared the current AI push to the company's previous metaverse pivot, noting that Meta is spending ahead of proven product demand. Zuckerberg also addressed the trade-off between immediate monetization and long-term development, noting that while the company may eventually sell compute power to large customers, its primary focus remains developing frontier models to maintain a competitive edge against rivals like Google and Microsoft.