Meta Plans Ambitious $65 Billion Investment in AI Projects by 2025
Meta Platforms Inc. (META) is allocating up to $65 billion in artificial intelligence (AI) projects by 2025, CEO Mark Zuckerberg revealed on Friday. This substantial investment will fund the construction of a massive data center and the expansion of AI teams.
Data Center and Infrastructure
Meta aims to establish a data center in Manhattan, expanding its computing power significantly. By 2025, the company anticipates deploying approximately one gigawatt of computing capacity and acquiring over 1.3 million graphics processing units (GPUs).
AI Team Expansion
Zuckerberg emphasized that Meta will "grow our AI teams significantly" in 2025, recognizing the importance of AI for its core products, innovation, and global technology leadership. Meta's investment in AI follows a recent $10 billion investment in a Louisiana data center and the acquisition of specialized computer chips for AI-powered products.
Industry Competition and Risk
Zuckerberg acknowledges that Meta and its competitors may be overspending on AI but believes the potential benefits outweigh the financial risk. "The downside of being behind is that you're out of position for the most important technology for the next 10 to 15 years," he stated.
Market Reaction and Analyst Outlook
Meta's announcement initially caused a premarket stock decline, but shares rebounded and rose 1.7% upon the opening of New York exchanges, indicating analyst optimism. Broadcom Inc. (AVGO), a major provider of chip design services for companies like Meta, experienced a 3.9% surge following Zuckerberg's announcement.
Bloomberg Intelligence analyst Robert Schiffman believes Meta's increased capital spending "may be its best use of capital, driving future growth and positioning itself as a leader in AI capabilities."
Zuckerberg's decision to announce Meta's spending plans on Facebook ahead of the fourth-quarter earnings report is unconventional but permissible under federal regulations.