Meta Issues New Stock To Fund AI

Tech giants are constantly searching for ways to fuel their rapid expansion, and the latest move from a major player offers a fresh financial strategy. On Wednesday, Meta confirmed it will create a new category of shares to help pay for its aggressive push into artificial intelligence.

This announcement came during the company’s third-quarter earnings call. Reports had circulated earlier in the day that Meta might issue non-voting stock, a type of share that does not grant owners a voice in corporate decisions. The company’s leadership stepped in to verify that this is indeed the plan moving forward.

Susan Li, the chief financial officer, explained that the new class of capital stock will be distributed to all current shareholders via a stock dividend. She stated that the goal is to create a publicly traded instrument that can be used for raising capital, compensating employees, and handling acquisitions. This approach is designed to preserve the voting power held by existing Class A and B shareholders.

Li emphasized that this structure allows Meta to keep its current founder-led governance in place. By expanding its funding tools, the company aims to gain the flexibility needed to invest heavily. She noted that this investment capacity is driven by the unprecedented momentum the business is seeing across various sectors, largely due to AI.

The financial results for the quarter were robust, surpassing expectations set by Wall Street analysts. Meta reported revenue of $64 billion, marking a 26 percent increase compared to the same period last year. However, this growth came with a significant increase in spending, with costs and expenses rising by 68 percent year-over-year.

The Reality Labs division, which handles augmented reality glasses, virtual reality headsets, and related software, is still operating at a loss. Yet, the bleeding is slowing down. The company expects these losses to narrow from their 2025 levels, projecting a deficit between $18 billion and $19 billion for the coming period.

Over the past year, Meta has released a variety of AI models, including Muse Spark and Muse Glimmer. Recently, the company added Muse Wonder and Muse Spark Open, the latter being an open-weight model with publicly available parameters. It also launched Muse Code, a tool for software developers. At its recent Connect event, Meta introduced cute avatars for its AI assistant, Muse, aiming to make the technology feel more relatable and shareable.

The reception to these AI products has been strong. CEO Mark Zuckerberg noted that more than 10 million people in the U.S. and Canada have set up personal agents in just a month and a half. He described the growth as strong, claiming the product has been number one in the App Store on almost every day during that period. Zuckerberg said the company is now entering an operational phase focused on scaling the service to eventually serve billions of people.

Despite the positive momentum, Li acknowledged that regulatory and legal challenges remain on the horizon. The company is monitoring active matters that could impact its financial results. Specifically, she mentioned ongoing scrutiny regarding youth-related issues in several markets, with a number of related trials scheduled in the United States in the coming months.