Meta is planning to sell up to $95 billion of stock to pay for its artificial intelligence buildout in what's set to be the largest equity raise in the company’s history, showing how even big tech’s biggest cash generators are under pressure to finance their efforts to lead in the AI race.
The Menlo Park, Calif., company said Monday that it had launched about $35 billion of underwritten public offerings, made up of Class A common stock and depositary shares tied to mandatory convertible preferred stock.
A second, larger tranche will follow via an at-the-market program, involving as much as $60 billion new non-voting class C shares. Meta expects those to begin trading in the first quarter of 2027, though the timing and terms aren’t final.
Three chipmakers that sell heavily to Meta – Nvidia, Advanced Micro Devices, and Broadcom – have reportedly expressed interest in buying up to $5 billion of the Class A shares combined.
The raise follows a quarter in which spending at Meta outran its cash generation. As noted by CNBC and other outlets, third-quarter revenue rose 26% from a year earlier to $64.60 billion, beating the $63.37 billion analysts expected, according to LSEG data. But free cash flow was negative $2.12 billion, Meta’s first shortfall in more than a decade, compared with positive free cash flow of $10.63 billion a year earlier.
During its Q3 earnings call, Meta also raised the floor of its 2026 capital-spending forecast to $135 billion – up from $130 billion – while maintaining the high end at $145 billion. That marks yet another moving of the goalposts for the company, which during its Q2 earnings pegged full-year capital expenditure at $125 billion to $145 billion.
Meta says it is building four data center “superclusters,” each with more than 1 gigawatt of capacity, and expects to nearly double its total infrastructure capacity this year.
The company's future spending commitments now total about $825 billion, according to Reuters. Meta said it will fund the push with a mix of operating cash flow, investment-grade debt, partnerships and equity, and analysts are expecting even more fundraising to come.
“We expect investors to continue to question the financing and potential for future capital raises,” William Blair analysts wrote in a note.
As of Sept. 30, Meta held $82.45 billion in cash, cash equivalents and marketable securities, against $80.92 billion of long-term debt.
Meta isn’t the only AI giant in turning to outside capital, as Alphabet Inc. sold $84.75 billion of equity in June. SpaceX took a different route on Monday, disclosing a financing deal with total principal payments of about $40 billion, under which an Apollo Global Management affiliate will buy AI chips and server hardware and lease them to the company.
Meta’s case for the spending rests largely on Muse, its consumer AI agent. Zuckerberg said more than 10 million people in the US and Canada opened Muse accounts within about six weeks of its September launch. Chief Financial Officer Susan Li said Meta’s AI businesses should begin contributing incremental revenue in 2027.
Meta first revealed its intentions to issue non-voting on Oct. 21, alongside earnings. At the time, it said it would issue class C shares in January, which would amount to a two-for-one stock split. Apart from funding acquisitions and retaining talent, the company said those shares would help preserve Zuckerberg's controling stake in Meta.
Last week, it was revealed Zuckerberg had told leadership he was weighing a move out of California because of the Proposition 40 ballot measure seeking a one-time 5% tax on the state's billionaires.
Under a deal Zuckerberg struck with the board, Zuckerberg can immediately sell 20% of the Class C shares he receives, equal to 10% of his total economic stake in Meta, which would let him pay a potential tax bill without giving up voting control. In return, he committed to remain a resident of California, or wherever Meta is headquartered, for eight years.
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