"In the midst of an unprecedented AI buildout, Meta is spending more than most. The company is building two massive data centers, and reporting indicates there will be as much as $600 billion in spending on U.S. infrastructure over the next three years. Those figures might not raise eyebrows in Silicon Valley, but they're starting to make Wall Street nervous."
"The issue came to a head this week as Meta reported quarterly earnings, which showed the company's operating expenses jumping $7 billion year-over-year and nearly $20 billion in capital expense. It was the result of intense spending on AI talent and infrastructure, which has yet to bring in meaningful revenue for the company. When analysts pressed for more specifics, Mark Zuckerberg made it clear the spending was just getting started."
""The right thing to do is to try to accelerate this to make sure that we have the compute that we need, both for the AI research and new things that we're doing, and to try to get to a different state on our compute stance on the core business," Zuckerberg told analysts on the call. "Our view is that when we get the new models that we're building in MSL in there and get like truly frontier models with novel capabilities that you don't have in other places, then I think that this is just a massive latent opportunity.""
Meta is rapidly increasing AI-related spending, building two large data centers and contributing to an estimated $600 billion in U.S. infrastructure investment over the next three years. Quarterly results showed operating expenses up $7 billion year-over-year and nearly $20 billion in capital expenditure, driven by hiring and compute investments that have not yet produced meaningful AI revenue. Mark Zuckerberg stated the company will accelerate compute buildout to support research and frontier models with novel capabilities. Investors reacted negatively, pushing Meta's stock down about 12% and erasing over $200 billion in market value, despite strong overall profits.
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