Meta's AI Spending Surge Drives Creation of New Share Class

Meta is establishing a new category of shares to finance its massive artificial intelligence ambitions without diluting the influence of current shareholders. Chief Financial Officer Susan Li disclosed the plan during the company's earnings call on Wednesday, following reports of the move that emerged alongside third-quarter results.

Li stated the company intends to “create a new class of non-voting capital stock, which will be distributed to all existing shareholders through a stock dividend.” This new instrument is designed to be publicly traded and can be utilized for capital raising, employee compensation, acquisitions, and other corporate functions while strictly preserving the voting power of current Class A and B shareholders.

The financial structure allows Meta to maintain its existing “founder-led structure” while expanding its “funding tools and give us flexibility to invest behind the unprecedented momentum we’re seeing across every part of our business, driven by AI,” Li added.

The move comes as the company's expenditure on technology infrastructure accelerates. While Meta reported revenue of $64 billion for the quarter, a 26% increase year-over-year, its costs and expenses surged by 68% during the same period. Additionally, the Reality Labs division, which develops AR glasses and VR headsets, continues to post losses, though the company forecasts these will contract to between $18 billion and $19 billion.

Despite the heavy investment, the company is reporting significant engagement with its AI products. CEO Mark Zuckerberg stated on the call that over 10 million people in the U.S. and Canada have configured Muse personal agents within six weeks. “Growth continues to be strong, and we have been number one in the App Store almost every day,” he said.

Zuckerberg indicated that the product has achieved “clear product-market fit” and is entering a scaling phase, with expectations to eventually “serve billions of people.” This follows the release of several new AI models and tools, including Muse Wonder and the coding agent Muse Code, which were launched in recent weeks.

Looking ahead, the company continues to face external pressures. Li noted that the firm is monitoring active legal and regulatory matters that could impact financial results, specifically citing scrutiny regarding youth-related issues across several markets and upcoming trials scheduled in the United States over the coming months.