- Meta CEO Mark Zuckerberg plans to continue his company’s artificial intelligence spending blitz well into the next year as rival tech giants do the same.
- While Meta is still planning out next year, the company said its AI initiatives will “result in a 2026 year-over-year expense growth rate that is above the 2025 expense growth.”
- For now, investors are OK with Meta’s big AI investments, with the company’s shares up nearly 12% in after-hour trading on Wednesday.
As other internet titans follow suit, Mark Zuckerberg, the CEO of Meta, intends to keep up his company’s artificial intelligence expenditure spree well into the upcoming year.
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In a second-quarter earnings call on Wednesday, Zuckerberg informed analysts that a lot of Meta’s recent business decisions, such as the company’s $14.3 billion June investment in the data-annotating startup Scale AI as part of a revamped AI strategy involving a wave of high-profile hires, were influenced by the rapid pace of AI’s advancement.
After assembling an AI Superintelligence team for Meta this summer, Zuckerberg stated that the firm needs “the absolute best and most elite talent-dense team” that can get the resources they require from a “leadingcomputefleet,” given the rapid growth of AI. According to him, Facebook, Instagram, and the rest of the company’s app family can use whatever these elite AI researchers create.
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“When we take a technology, we’re good at driving that through all of our apps and our ad systems,” Zuckerberg stated. “There’s no other company that is as good as us at kind of taking something and getting it in front of billions of people.”
But there is a price for those AI efforts.
On Wednesday, Meta increased the low end of its prior estimate of between $113 billion and $118 billion to say that it anticipates its total expenses for 2025 to be between $114 billion and $118 billion. Additionally, Meta stated that its AI projects will “result in a 2026 year-over-year expense growth rate that is above the 2025 expense growth,” even though the business is still planning for next year.
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Other tech behemoths are likewise investing heavily in AI personnel and initiatives.
During its earnings release last week, Alphabet announced that it was increasing its 2025 capital expenditures forecast by $10 billion to $85 billion.Microsoft announced on Wednesday that it will spend $30 billion on capital expenditures in the first quarter of its fiscal year, exceeding analyst projections of $24.23 billion.
With Meta’s stock up about 12% in Wednesday’s after-hours trade, investors appear to be comfortable with the company’s significant AI spending for the time being. It helps that Meta gave third-quarter sales forecast that exceeded Wall Street projections and reported good second-quarter results that beat both the top and bottom.
Additionally helpful is Zuckerberg’s statement that AI led to “greater efficiency and gains across our ad system,” which perhaps reassures anxious investors that Meta’s significant investment in AI is producing some noticeable results right away.
Even though the company’s Reality Labs division is still losing money—it reported an operating loss of $4.53 billion in the second quarter—the unexpected success of the Ray-Ban Meta smart glasses appears to have temporarily allayed investor ire.
“I continue to think that glasses are basically going to be the ideal form factor for AI, because you can let an AI see what you see throughout the day, hear what you hear, talk to you,” Zuckerberg stated. “Once you get a display in there, whether it’s the kind of wide holographic field of view, like we showed with Orion, or just a smaller display that might be good for displaying some information, that’s going to unlock a lot of value, where you can just interact with an AI system throughout the day.”
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