Meta plans to focus on capital expenditure this year, spending about $115 to $135 billion on AI. Mark Zuckerberg, CEO of Meta, revealed this in the company’s fourth-quarter earnings report. The amount accounts for nearly twice what Meta had spent on capex last year when the company revamped its AI unit.
Meta’s Remarkable Growth
This project jump is enormous; Meta has spent $28 billion and $39 billion in 2023 and 2024, respectively. The recent shell out amounts to be bigger than what the larger AI rivals like Google had spent last year, which was $93 billion. The majority of the spending will be on hiring researchers to develop a ‘superintelligent’ AI model with remarkable abilities. Investors’ concerns about Meta AI’s spending spree were comforted in the company’s latest results. Meta’s core business of online advertising continued to grow, hitting a revenue of $59.89 billion in the fourth quarter, which was up 24% from last year. Meta attributed its growth to AI investments, which the company reported had improved ad targeting and recommendations of videos and other posts to users. The company bagged a profit of $22.76 billion, up 10% from last year.
In the past year, Meta launched ads on WhatsApp and Threads, creating a direct rivalry with platforms like Elon Musk’s X. Meta is planning to release its new large language models over the coming months and merge them with the recommendation systems powered by Facebook, Instagram, Threads, and the ads system. However, Meta’s finance chief, Susan Li, told analysts that the company is continuing to be ‘capacity constrained’, needing more computing power to further enhance its core ad business, while also providing the company’s AI team with the necessary resources they require for the creation of more advanced models and products.
Future Powered by Meta
Zuckerberg stated that he is looking forward to 2026 more optimistically, as the company is expecting major investments geared towards supporting the mission of building a personal superintelligence. Zuckerberg’s greatest flex last year was the $14.3 billion investment in scale AI. This accelerated the welcoming of the founder and CEO, Alexandr Wang, and a few of his top engineers and researchers to Meta. Wang is currently heading Meta’s TBD AI unit, which is now testing a new frontier model code-named Avocado (Llama 4), intending to be a successor to Meta’s Llama family of models, and is expected to be released in the first half of this year.
Meta’s new AI spending will be more concentrated on infrastructure like data centres, an initiative the company announced this month under the name Meta Compute. Meta has hired Dina Powell McCormick, a former adviser to US President Donald Trump and banker at Goldman Sachs, to be its new president and vice chair to focus more on data centre banking deals. Zuckerberg stated that the Meta Compute would lead to data centres that are powered by “tens of gigawatts this decade, and hundreds of gigawatts or more over time.”
