Meta Raises A.I. Spending, Even as Cash Pressures Grow

By the Editorial Team · Friday, October 23, 2026

Meta Platforms is increasing its capital expenditure forecast for 2026 to $135 billion, primarily to expand its data center capacity and support its growing investments in artificial intelligence despite facing negative cash flow and rising debt. This aggressive funding underscores Meta's commitment to compete with key AI rivals like OpenAI and Anthropic, aiming to bolster its core advertising business and develop new AI-driven products while managing significant legal and financial challenges.

Meta Platforms Inc. is increasing its investment in artificial intelligence (A.I.) despite mounting cash flow pressures, signaling its commitment to compete in the rapidly evolving technology sector. On Wednesday, the Silicon Valley company announced it would raise the lower end of its capital expenditure forecast for 2026 to $135 billion from an earlier estimate of $130 billion, with most of the funds earmarked for expanding data center infrastructure that supports advanced A.I. operations.

The intensified spending has contributed to a negative free cash flow of $2.12 billion in the third quarter ended Sept. 30, a sharp reversal from positive cash flow of $784 million in the previous quarter and significantly down from $8.55 billion reported in the second quarter of 2025. To mitigate financial constraints and create flexibility for further investments, Meta plans to introduce a new class of shares in January, following a two-for-one stock split intended to expand the number of shares available for trading.

Susan Li, Meta’s chief financial officer, emphasized the company’s intention to maintain aggressive investment in both its foundational business and emerging A.I. projects. “We are still developing our budget and capacity plans for next year, but we expect to continue investing aggressively to support both our core business and emerging A.I. initiatives,” she said.

Meta’s third-quarter results reflected robust revenue growth, driven largely by its online advertising business. Revenue rose 26 percent year-over-year to $64.6 billion, while operating costs surged 68 percent to $51.6 billion. Net profit increased to $9.8 billion, up from $2.7 billion the previous year, although earnings the prior year had been affected by a significant tax charge.

The company faces intense competition with other leading A.I. players, including Anthropic and OpenAI, which are also investing heavily in computing power. Meta’s cumulative spending on A.I. reached $39 billion in 2024 and surged to $72 billion in 2025. Its long-term debt rose to $80.9 billion in the third quarter, up from $58.7 billion a year earlier. To support its data center expansion, Meta has engaged in nontraditional financing arrangements, such as a $50 billion data center project in Louisiana funded by private credit firms, which do not appear directly on its balance sheet.

Among its recent A.I. initiatives, Meta launched the Muse app in September, which achieved over 10.5 million downloads by October, becoming the fastest-growing consumer A.I. application since ChatGPT’s debut in 2022. The firm also released new A.I. models this month that reportedly perform near the level of rival systems from Anthropic and OpenAI, though still lag behind in coding tasks. CEO Mark Zuckerberg has expressed ambitions for Meta to sell its A.I. technology to other businesses, competing in a market currently dominated by those companies.

Meta’s ramped-up investment comes amid skepticism over the sustainability and profitability of large-scale A.I. spending. Shares of companies linked to data center construction, like CoreWeave and Oracle, have declined due to investor concerns about their financial stability. Nevertheless, analysts view Meta’s continued financial commitments as a sign of determination. “Zuckerberg has shown that he’s all in on winning this race,” said Andrew Rocco, an analyst at Zacks.

The company also remains burdened by significant legal expenses. In the past quarter, Meta recorded a $9.9 billion legal charge related to ongoing lawsuits alleging that its social media platforms contribute to addiction. Earlier this year, Meta settled claims with 47 states for $17.1 billion regarding allegations the company harmed young users. Additionally, a New Mexico judge recently ordered Meta to pay $25 billion for purportedly misleading users about its data privacy practices.

Despite these challenges, Zuckerberg highlighted A.I.’s role in strengthening Meta’s advertising business, which generates nearly all of the company’s revenue. Daily active users across Meta’s family of apps grew 3 percent year-over-year to 3.64 billion. However, its Reality Labs division, responsible for smart glasses and other hardware incorporating cameras and A.I. assistants, saw revenue decline 6 percent to $443 million, with losses steady at approximately $4.1 billion compared to the prior year.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.