Meta wants to raise "tens of billions" by selling shares. It was impressed by Alphabet's record

Meta, which owns Facebook and Instagram, is considering raising tens of billions of dollars through a share issue, the Financial Times says, as the company looks for new sources of funds to finance its AI infrastructure, which requires more and more capital. Meta's management was impressed by Alphabet's record $85 billion share offering with Berkshire Hathaway, the newspaper claims. Moreover, the volume was increased by $5 billion due to high investor demand.

Meta Platforms executives were exploring "creative" ways to raise capital this week, three sources familiar with the company's plans told the Financial Times. Money is needed for AI: Meta is preparing to increase capital spending related to artificial intelligence to $145 billion this year and increase the amount in 2027. Meta must find new ways to fund the huge data centers needed to train and run advanced AI models to realize Meta CEO Mark Zuckerberg's vision of "personal superintelligence," the FT writes.

Discussions intensified after Alphabet's record-breaking offering, FT sources said. One of the publication's sources familiar with Meta's discussions claims that the company was studying Alphabet's capital raising structure, which included the issuance of mandatory convertible preferred securities. Such a structure raises capital immediately, but potentially delays the issuance of shares for years, the FT explained.

Meta has not yet hired banks to prepare the issue and may not end up issuing new shares, the FT notes. One of the newspaper's interlocutors noted that it is too early to talk about the decision and that all financing options are being considered.

A Meta spokesperson described talks of a share sale as "pure rumor" in comments to the FT, but added: "We have been clear that there are huge opportunities ahead in AI and we will continue to focus on raising capital in the most flexible ways possible to support this direction."

Shares of Meta at the end of trading on Friday, June 6, collapsed by 5.5% to $593. The papers fell in price in parallel with the sell-off in the market as a whole, but their decline accelerated after the FT report.

Meta is considering selling shares amid a flurry of activity in the market. Elon Musk's private space company SpaceX is expected to launch an IPO next week. AI startups Anthropic and OpenAI are also working on their own large-scale listings. Major tech companies have also turned to the debt markets this year in a bid to fund AI infrastructure, including buying chips and building data centers, the FT writes.

Meta executives realize they will have to act quickly if they decide to raise capital through a share offering to meet demand and keep investors interested amid a historic glut of deals in the US public markets, the FT notes.

Analysts say Meta's big tech rivals, such as Microsoft and Amazon, are also likely to consider selling shares as their data center costs soar and investors wonder about the impact on the companies' balance sheets, the publication writes.

This article was AI-translated and verified by a human editor