Meta will invest $600 billion in the United States by 2028 to build artificial intelligence (AI) data centers.
“As the importance of AI grows, so will the importance of data centers,” the company said in a Friday (Nov. 7) press release. “We’ll continue to build and scale infrastructure for the future of AI while supporting the communities that host us.”
Meta told investors during an Oct. 29 earnings call that it would be stepping up its infrastructure spending as it races to build what CEO Mark Zuckerberg calls “personal superintelligence.”
Chief Financial Officer Susan Li said the company expects capital-expenditure dollar growth to be “notably larger in 2026 than 2025” and total expenses to grow at a “significantly faster” rate next year.
The biggest driver of those expenses will be compute — both company-owned data centers and third-party cloud services — followed by compensation for AI talent, Li said.
During the same earning call, Zuckerberg said of the investment: “We keep on seeing this pattern where we build some amount of infrastructure to what we think is an aggressive assumption, and then we keep on having more demand to be able to use more compute. So, I think that suggests that being able to make a significantly larger investment here is very likely to be a profitable thing over some period.”
It was reported Wednesday (Nov. 5) that Meta investors were “losing patience” with the company’s AI spending, remembering the spending on the metaverse that sent the firm’s shares tumbling.
While the company’s most recent earnings exceeded expectations, investors were concerned about its capital expenditures.
Tiffany Wade, senior portfolio manager at Columbia Threadneedle Investments, told Bloomberg: “This feels like a return to Meta’s old days of overspending on things that are frivolous or which don’t have appropriate return demands tied to them. Investors are losing patience.”
It was reported Thursday (Nov. 6) that companies’ investments in projects related to AI are expected to fuel the debt issuance market through next year.
U.S. investment-grade bond issuance could reach $1.7 trillion this year and $1.85 trillion in 2026, driven in part by blue-chip companies borrowing more to fund their AI investments, Maureen O’Connor, global head of high-grade debt syndicate at Wells Fargo, told Bloomberg TV.
Source: https://www.pymnts.com/