Meta plans to raise up to $95 billion in equity to fund AI expansion, with Nvidia, AMD and Broadcom interested in up to $5 billion

Meta Platforms said on October 26 it plans to raise up to $95 billion in equity to fund its costly expansion in artificial intelligence. The money will go to data centres, cloud computing power and other infrastructure as Meta competes with AI heavyweights OpenAI and Anthropic. The announcement comes a week after Meta raised the lower end of its annual spending forecast, showing the scale of its AI bet.

How the $95 billion breaks down: $35 billion now, $60 billion later

The financing has two parts. The first is public offerings of about $35 billion in common stock and convertible preferred stock, launched now. The second is an at-the-market share sale program of up to $60 billion, to start after its new non-voting Class C shares begin trading, expected in the first quarter of 2027. Together, the two parts total up to $95 billion.

What Meta holds, and what it has already committed

Under last week's quarterly filing, Meta had cash, cash equivalents and marketable securities of $82.45 billion as of September 30, slightly above its long-term debt of $80.92 billion. But the company has committed to spend about $825 billion in the future, primarily on data centres, AI infrastructure and cloud computing power. In other words, cash on hand does not cover the future bill already lined up, and the equity raise pre-finances that long-term spending.

Chipmakers' interest is intent, not a commitment

Meta said chip companies Nvidia, Advanced Micro Devices and Broadcom have expressed interest in purchasing up to $5 billion of Meta's Class A common stock in the offering. That is an expression of interest, not a confirmed purchase, and final amounts and terms have not been disclosed. For Meta, having its chip suppliers willing to become shareholders is itself a signal of how tightly the AI infrastructure race binds suppliers and buyers together.

The earnings backdrop: first negative cash flow in over a decade

Last week's results showed Meta reported a $2.12 billion cash burn in the third quarter, its first negative free cash flow in over ten years, compared with positive cash flow of $10.63 billion a year ago. Third-quarter revenue was $64.60 billion, ahead of Wall Street estimates of $63.37 billion, and fourth-quarter revenue is projected at $73 billion to $76 billion. The company also raised the lower end of its annual capital expenditure forecast from $130 billion to $135 billion, keeping the top end at $145 billion.

What to watch next

The market will now watch three things: pricing and demand for the $35 billion offering, the actual pace of the $60 billion at-the-market program once Class C shares trade, and when AI spending turns into returns. Meta says its AI investments are already lifting engagement, ad performance and monetisation; but the third-quarter cash burn shows the expansion bill is arriving ahead of the payoff.