Meta to raise up to $95 billion in equity for AI buildout

Summary

• Meta said Monday it plans to raise up to $95 billion in equity for AI infrastructure.
• The company has committed to roughly $825 billion in future spending, mostly data centers and cloud capacity.
• The raise follows Meta's first negative quarterly free cash flow in more than a decade.

The latest

Meta Platforms plans to raise as much as $95 billion in equity to pay for an AI expansion spanning data centers, cloud computing power and other infrastructure, the company said Monday. It immediately launched public offerings of about $35 billion in common stock and convertible preferred stock, with a far larger share-sale program to follow once a new class of non-voting stock starts trading.

Details

• The structure: Reuters reported that the roughly $35 billion offering combines common stock and convertible preferred stock. Separately, Meta said it plans an at-the-market share sale program of up to $60 billion, launching only after its new non-voting Class C shares begin trading — expected in the first quarter of 2027.
• The chipmakers: Meta said Nvidia, Advanced Micro Devices and Broadcom have expressed interest in buying up to $5 billion of its Class A common stock in the offering. All three are suppliers to the AI infrastructure buildout the raise is designed to fund. Meta did not say whether those indications are binding.
• The spending commitment: The company has committed to about $825 billion in future spending, driven primarily by data centers, AI-related infrastructure and cloud computing power, according to Meta. That figure dwarfs the equity raise itself, leaving the bulk of the program to be funded from other sources.
• The cash position: Meta held $82.45 billion in cash, cash equivalents and marketable securities as of September 30, according to its quarterly filing last week. That barely exceeded long-term debt of $80.92 billion, a narrow cushion against a capital program running into the hundreds of billions.
• The cash burn: Meta reported a $2.12 billion cash burn in the third quarter, its first negative free cash flow in more than ten years. A year earlier the same quarter produced positive free cash flow of $10.63 billion, a swing of roughly $12.75 billion.
• The capex guidance: Last week Meta lifted the lower end of its annual spending forecast, now expecting capital expenditure of $135 billion to $145 billion this year, up from a previous range of $130 billion to $145 billion. The ceiling was left unchanged.
• The revenue line: Third-quarter revenue came in at $64.60 billion, ahead of Wall Street estimates of $63.37 billion, Reuters reported. Meta guided fourth-quarter revenue to between $73 billion and $76 billion, implying continued growth even as free cash flow turned negative.
• The competitive frame: Meta has escalated spending on data centers, computing capacity and AI products to compete with OpenAI and Anthropic, according to Reuters. The equity raise marks a shift toward funding that race through shareholders rather than cash on hand alone.

Between the lines

The sequencing is the story. Meta's cash pile barely covers its long-term debt, and the quarter just reported consumed cash rather than generating it — yet the committed spending runs to $825 billion. Funding that from operations alone is arithmetically out of reach, which is what the $95 billion equity program addresses. The Class C structure means new capital arrives without diluting voting control.

What's next

Watch the pricing and final size of the $35 billion offering, whether Nvidia, AMD and Broadcom convert interest into purchases, and the first-quarter 2027 start of Class C trading that unlocks the $60 billion at-the-market program.

Source: Reuters