Meta plans to spend at least $60 billion on capital expenditures this year, far exceeding expectations, significantly expanding its AI team

On Friday, Meta Platforms CEO Mark Zuckerberg stated that the company's capital expenditures will significantly increase this year, driven mainly by artificial intelligence and the construction of large new data centers.

Zuckerberg announced the spending estimate in a Facebook post. Meta plans to invest between $60 billion and $65 billion in AI-related capital expenditures this year. This figure provided by Zuckerberg is much higher than analysts' predictions. Previously, Bloomberg estimated that investors expected Meta's capital expenditures to reach $51.3 billion by 2025.

Zuckerberg wrote:

This will be a decisive year for artificial intelligence.

I expect that by 2025, Meta AI will become the leading AI assistant, serving over 1 billion people; Llama 4 will be the most advanced AI model; at the same time, we will also develop AI engineers who will gradually contribute more and more code to the company's research and development (R&D).

To achieve this goal, Meta is building a data center with over 2GW of capacity, large enough to cover a significant portion of Manhattan. We plan to launch about 1GW of computing power by 2025 and have over 1.3 million GPUs by the end of the year.

This year, we plan to invest $60 billion to $65 billion in capital expenditures (Capex) while significantly expanding our AI team; we have enough capital to continue investing in the coming years. This is a massive undertaking that will drive the development of core products and businesses in the coming years, unleashing unprecedented innovation and further consolidating America's technological leadership.

Let's build it together!

In recent years, Meta has been increasing its investment in artificial intelligence. The company has not yet disclosed its capital expenditure figures for 2024, but analysts expect it to reach around $38 billion, which is already a 40% increase from 2023. Zuckerberg's estimate for this year's capital expenditures indicates an acceleration in growth compared to 2024.

Meta operates a range of AI products, including open-source models that developers can build upon and AI chatbots embedded in its applications. In 2024, Meta initiated the construction of six new data centers. The data center mentioned by Zuckerberg, comparable in size to cover Manhattan, is located in Louisiana.

Zuckerberg stated during last year's third-quarter earnings call: "This investment in building infrastructure may not be the news investors want to hear in the short term. But I believe the opportunities here are just too great."

Since the rise of generative AI over the past two years, tech giants have been ramping up their investments in AI infrastructure, with executives competing to see who can build data centers faster and larger, and who has the most GPU resources:

Amazon, Microsoft, Google parent company Alphabet, and Meta, the four major tech giants, saw their total capital expenditures in the third quarter of 2024 increase by nearly 60% year-on-year, reaching nearly $59 billion. The financial reports expected to be released next week are anticipated to show even higher spending levels.

Since the rise of generative AI, investors have generally welcomed these massive expenditures, but some still question the profitability paths of these companies. Microsoft is attempting to bundle AI products with its core business software, while Google is integrating Gemini AI into its core products, with mixed results.

Ben Black, co-head of internet research at Deutsche Bank, commented on Zuckerberg's statement on Friday:

He is now full of energy and fully committed to AI development. As long as the company can continue to deliver good revenue figures, investors will recognize this.

Some tech companies, despite past disagreements with Trump, are now seeking to leverage his interest in "large-scale projects" and his administration's support for developing AI capabilities in the U.S.

Meta Platforms' stock fell 0.85% in pre-market trading but ultimately closed up 1.7%. Chip stocks mostly rose in early trading, with Nvidia up 0.8%, AMD up over 1%, TSMC ADR up 0.7%, and Arm Holdings up 0.7%. However, by the close, Nvidia fell over 3%, AMD dipped slightly, and Arm dropped 2.4%