hunter-gplpcn
Meta Platforms is considering raising tens of billions of dollars through a stock offering to help finance its artificial intelligence buildout, according to people familiar with the discussions. The talks are at an early stage, the people said, and no decision has been made on the size of a sale or which banks would manage it.
The exploration, reported by the Financial Times, makes Meta the latest of the four largest American technology companies to tap capital markets for AI infrastructure spending. Alphabet completed an $85 billion equity raise this month, and Amazon arranged $31.5 billion in loans and bonds within 48 hours. Microsoft has expanded its debt program. The four companies are on track to spend close to $700 billion on AI capital expenditures this year, a figure that has become the defining number of the industry’s current phase.
Meta’s need for new capital has been building for two years. The company raised its 2026 capital expenditure forecast in April to as much as $145 billion, from an earlier range whose lower bound it has since lifted to $130 billion. The spending is concentrated in data centers, chips and the power contracts needed to run them, and it has begun to squeeze the financial statements. In the second quarter, Meta’s operating income fell 8% from a year earlier to $18.8 billion even as revenue rose 28%, because costs and expenses surged 55%. Research and development spending, the largest line item in the increase, rose 68%. Free cash flow fell to $784 million in the quarter from $8.5 billion a year earlier, and analyst consensus now holds that Meta’s free cash flow will turn negative in 2026 and 2027.
Mark Zuckerberg, Meta’s chief executive, has acknowledged the pressure while insisting the spending is working. On the company’s earnings call he said Meta’s compute resources are in high demand, noting that the company receives “quite a number of offers at a meaningful premium over what we paid for the compute.” Meta has begun renting excess capacity to outside customers, a way to generate revenue from infrastructure built for its own services, though Zuckerberg said internal returns remain the priority.
The company has already started using the financial tools of the moment. Meta completed a $27.3 billion special purpose vehicle transaction around its Louisiana data center campus, a structure that finances hardware off the balance sheet. A stock sale would go further, converting the company’s public float into a funding source for the first time in years and spreading the cost of the buildout across shareholders.
The business case for the spending is straightforward on the revenue side. Meta’s family of apps closed the quarter with 3.6 billion daily active users, and both ad impressions and ad prices rose by double digits. The company argues that AI is improving ad targeting, recommendation feeds and the tools its advertisers use, and that the infrastructure spending is what keeps those systems ahead of competitors. The question investors keep asking is whether the returns arrive before the cash runs out.
The equity option carries its own costs. A large stock sale would dilute shareholders at a moment when Meta’s shares have been volatile, and the market punished the company after its second-quarter report, sending the stock down about 10% even as revenue growth accelerated. Investors who accepted the capex guidance may be less tolerant of a second dilution event on top of the spending itself.
Meta’s alternatives are limited. Its balance sheet is strong, with tens of billions in cash, but the pace of spending would exhaust the cushion within a couple of years. Debt is available, but the company has been cautious about taking on debt, and a heavy load would complicate future share buybacks. Equity is the cleanest option, which is why the discussions are happening at all.
A raise of the size under discussion would also reshape Meta’s capital structure after a decade of aggressive buybacks. The company has spent well over $100 billion repurchasing its own shares since 2020, a program that shrank the float and supported the stock, and a large issuance would reverse part of that work. Zuckerberg has historically preferred buybacks to dividends and debt to equity, and the fact that the company is weighing a stock sale at all is a measure of how the capex curve has changed the math. Investors will want to know whether the proceeds fund capacity that generates returns, or simply delay the day of reckoning.
The decision, when it comes, will close a circle that began with Google’s offering: every major AI spender will have chosen how to fund the buildout. Google chose stock. Amazon chose loans and bonds. Microsoft chose a mix. Meta, if it proceeds, will be the last of the four to move, and the size of its raise will be read as a measure of how much longer the AI capex wave has to run. The four companies together are not treating this as a cyclical investment. The money is being committed to build the infrastructure of the next decade, and the bills are coming due in the form of shares, bonds and loans, in volumes the market has never seen.
