Meta plans record USD 97.5 billion equity raise to fund AI expansion

Meta Platforms has expanded its planned equity fundraising to USD 97.5 billion as the social media giant accelerates investment in artificial intelligence infrastructure, including data centers, chips and computing capacity.

According to Reuters, the company increased its common stock offering from USD 22.5 billion to USD 25 billion, pricing the shares at USD 625 each. It also priced 250 million depositary shares at USD 50 each, equivalent to USD 12.5 billion.

Together, the two offerings amount to USD 37.5 billion. Meta also plans a separate at-the-market share-sale programme worth up to USD 60 billion, taking its potential total fundraising to USD 97.5 billion.

Under an at-the-market programme, a company sells shares gradually at prevailing market prices rather than issuing the entire amount at once. Meta expects to launch the programme after its new non-voting Class C shares begin trading, which is anticipated in the first quarter of 2027. The timing and terms have not been finalised.

Nvidia, AMD and Broadcom show interest

Meta's fundraising plan has attracted interest from chipmakers Nvidia, Advanced Micro Devices and Broadcom, which have indicated a willingness to invest up to USD 5 billion combined in Class A shares.

Nvidia separately announced that it would invest USD 3 billion in Meta's equity offering.

The involvement of chip suppliers has raised concerns about an increasingly circular flow of capital in the AI industry, where companies supplying hardware are also helping finance major customers that purchase their products.

Meta is investing heavily in AI infrastructure to strengthen its position against rivals such as OpenAI and Anthropic.

The fundraising also reflects a broader shift among major technology companies towards raising capital through equity and debt markets to support AI investment, rather than relying entirely on internally generated cash.

Alphabet, Google's parent company, expanded its equity offerings to USD 84.75 billion earlier in 2026.

AI expansion puts pressure on cash flow

Meta's aggressive spending has begun to weigh on its cash generation. The company reported negative free cash flow of USD 2.12 billion in the third quarter of 2026, compared with positive free cash flow of USD 10.63 billion a year earlier.

The company held USD 82.45 billion in cash, cash equivalents and marketable securities as of September 30, while its long-term debt stood at USD 80.92 billion, according to its latest quarterly filing.

Meta also raised the lower end of its annual capital expenditure forecast last week, taking the expected range to USD 135 billion to USD 145 billion.

Despite the financial pressure, the company is counting on growing demand for its AI products and improved models to generate returns over time. Its consumer-focused AI agent, Muse, and a new series of AI models have helped support its investment strategy.

However, the scale of its spending has prompted questions about how much additional capital the company may need and how quickly its AI investments can deliver sustainable returns.

William Blair analysts said investors were likely to continue questioning Meta's financing requirements and the possibility of further capital raises, while noting that the fundraising reflected both the company's confidence in AI's long-term potential and the increasingly capital-intensive nature of the sector.

Meta's shares fell about 1.4% in morning trading following the announcement, according to Reuters.

The planned fundraising underscores the growing financial demands of the AI race, as technology companies compete to secure computing power and build infrastructure while investors assess whether future returns will justify the cost.