Meta Platforms is significantly boosting its planned equity fundraising to $97.5 billion, aiming to enhance its artificial intelligence (AI) infrastructure. The expansion includes investments in data centers, chips, and overall computing capacity. Initially, Meta had announced a common stock offering of $22.5 billion, but this has been increased to $25 billion, with shares priced at $625 each. Additionally, the company has priced 250 million depositary shares at $50 per share and introduced a separate at-the-market share sale program valued at up to $60 billion, with trading in the new non-voting Class C shares expected to start in the first quarter of 2027.
Several leading chipmakers, including Nvidia, Advanced Micro Devices, and Broadcom, have shown interest in purchasing Meta’s shares, with potential investments totaling up to $5 billion. Notably, Nvidia has confirmed plans to invest $3 billion in the offering. The involvement of chip suppliers underscores the growing financial ties between AI companies and the tech providers supporting their infrastructure.
The expansion into AI is exerting financial pressure on Meta, as highlighted by a negative free cash flow of $2.12 billion in the third quarter, a stark contrast to a positive cash flow of $10.63 billion in the same period the previous year. As of September 30, Meta’s financial reserves include $82.45 billion in cash, cash equivalents, and marketable securities, along with $80.92 billion in long-term debt.
In response to the growing financial demands of AI development, Meta has raised the lower end of its annual capital expenditure forecast, now projected to be between $135 billion and $145 billion. The company is betting that the surging demand for AI products and the advancement of competitive AI models will eventually yield substantial returns. This fundraising initiative is part of a broader trend among major technology firms leveraging equity and debt financing to accommodate the increasing costs associated with AI infrastructure.