THE CRUNCH
Meta has announced plans to raise $95bn (£71bn) to help cover its AI spending, in a two-part share offering announced on Monday. The first part is a $35bn underwritten public offering, with chipmakers Nvidia, AMD and Broadcom named as interested cornerstone investors who could buy up to $5bn of the stock on offer. The second is a $60bn at-the-market offering, in which new common stock will be sold to investors at the going market rate in future.
The $60bn portion will use a new class C share that Meta said last week it was creating. These shares carry no voting rights, which means they can be sold without diluting Mark Zuckerberg's control of the company. Meta said the plans would support its continued investment in AI infrastructure and what it calls personal super intelligence. Its shares rose in premarket trading on the news.
The fundraising lands amid a rougher backdrop for smaller AI infrastructure firms. Elon Musk wrote on X on Sunday that debt markets had almost entirely shut off access to money for companies without substantial revenue independent of AI datacentres, predicting that more than 200 "neocloud" providers, which lease computing power to AI companies, would see "guppy-level death and consolidation". Shares in Nebius, CoreWeave and Iren fell more than 2% in premarket trading on Monday before recovering after trading began.
Fears about neocloud finances centre on their high levels of borrowing, approximately $35bn at CoreWeave, and whether the AI market will grow fast enough to service it. CoreWeave's stock has declined by more than a third over the past month, and its chief executive Michael Intrator reportedly told staff in an internal memo that some investors had not understood the $30bn company. Analyst Neil Wilson of Saxo UK suggested the diverging market reactions showed investors favouring financially robust firms: Meta can lean on equity raises to minimise debt, while the neoclouds cannot.