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Meta plans $95bn stock offering to bankroll AI expansion

Chipmakers Nvidia, AMD and Broadcom will act as cornerstone investors
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{"text":[[{"start":8.76,"text":"Meta is planning to raise $95bn in one of the largest-ever stock offerings to fuel its massive AI infrastructure spending, backed by chipmakers Nvidia, AMD and Broadcom, who will act as cornerstone investors."}],[{"start":23.36,"text":"The deal is the latest example of Big Tech companies turning to the capital markets to fund their AI ambitions, with Google, SpaceX and soon Anthropic all issuing a flood of new shares."}],[{"start":34.88,"text":"The equity raises come alongside extensive borrowing by the so-called hyperscalers, which are projected to spend as much as $700bn on AI data centres this year."}],[{"start":45.88,"text":"Meta on Monday said it planned to raise $35bn in underwritten public equity offerings. It also intends to raise a further $60bn via an “at the market” programme, which it said is expected to begin in the first quarter of 2027."}],[{"start":60.12,"text":"“AI is creating significant opportunities for Meta across its core business and new products and services,” the Silicon Valley company said. “Meta’s AI investments are already generating tangible returns through increased engagement, improved advertising performance and increased monetisation.”"}],[{"start":77.96,"text":"Nvidia, AMD and Broadcom, which all supply Meta with chips and other computing infrastructure to power its AI data centres, have indicated interest in becoming “cornerstone investors” in the equity offering. Meta said the three US companies could collectively contribute up to $5bn."}],[{"start":96.08,"text":"Meta’s share sale comes amid a pullback in US tech stocks, as investors worry about the sustainability of the AI boom that has powered Wall Street’s rally in recent years. The Nasdaq 100 index has lost more than 5 per cent over the past month, dragged down by a heavy sell-off in semiconductor shares."}],[{"start":114.02,"text":"Also on Monday, SpaceX confirmed that it had struck a $40bn AI chip financing deal led by private capital group Apollo. The deal, which SpaceX said was the largest of its kind involving Nvidia-powered AI servers, will run over five years, starting in the first half of next year."}],[{"start":131.52,"text":"SpaceX said the agreement “diversifies our funding sources and addresses a notable portion of the funding required to deliver on our growth plans as we aim to get additional compute online at record speeds”."}],[{"start":142.2,"text":"Later in the day, Broadcom announced a $63bn debt deal under which a special-purpose vehicle (SPV) would use financing from Blackstone, Bank of America, Citi and Morgan Stanley to buy Broadcom’s chips and lease them to Anthropic. Broadcom will provide a residual value guarantee to the SPV equivalent to the financing provided by the three banks."}],[{"start":166.8,"text":"Meta stock ended Monday 1.9 per cent lower. Shares in Mark Zuckerberg’s social media group, which owns Instagram and WhatsApp, tumbled by 7 per cent last Thursday after it warned investors it would need to raise “hundreds of billions of dollars” over several years to fund its bet on AI."}],[{"start":185.8,"text":"Meta last week reported a 26 per cent jump in sales in the third quarter, ahead of analysts’ estimates, and projected capital spending of up to $145bn this year."}],[{"start":197.92,"text":"Meta indicated that it had agreed to spend more than $800bn on leases and contracts related to data centres and energy supplies over the next decade, as well as to expand its portfolio of AI wearable devices, such as its Ray-Ban Meta smart glasses."}],[{"start":214.92,"text":"Meta’s latest deal comes after Google’s parent Alphabet announced a $90bn equity financing in June, which lead bookrunner JPMorgan said was the “largest multi-tranche equity transaction in history”."}],[{"start":228.28,"text":"After SpaceX completed the biggest-ever initial public offering in June, Anthropic is expected to launch its own stock market debut before the end of this year."}],[{"start":238.16,"text":"Meta is racing against SpaceX as well as OpenAI, Google and Anthropic to stay at the “frontier” of AI development."}],[{"start":246.44,"text":"After a faltering start, Zuckerberg’s multibillion-dollar AI spending spree has produced a pair of hit products in recent weeks: Muse Wonder AI, a powerful new model that ranks alongside the most capable from OpenAI and Anthropic; and its consumer-focused AI agent, Muse, which has attracted millions of users since launching last month."}],[{"start":267.12,"text":"However, Meta’s huge outlay is starting to eat into its cash flows when many lenders are becoming more cautious about debt-fuelled AI infrastructure spending."}],[{"start":276.08,"text":"Meta’s latest fundraising scheme is part of a complex new stock structure, unveiled last week, that is intended to allow the company to sell shares to fund its AI investments without diluting Zuckerberg’s control of the company. The move could face shareholder opposition after Meta abandoned a similar plan in 2017."}],[{"start":301.4,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1793060347_5071.mp3"}

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