Meta CEO Mark Zuckerberg defends AI spend: ‘We’re seeing the returns’

Meta CEO Mark Zuckerberg sings a familiar tune when it comes to artificial intelligence: It’s better to invest too much than too little.

In his company’s third-quarter earnings call on Wednesday, Zuckerberg touched on Meta’s big spending this year; most notably its $14.3 billion investment in Scale AI as part of its plan to overhaul its artificial intelligence unit, now known as Super Intelligence Labs.

Some skeptics worry that spending by Meta and its AI rivals (OpenAI) is fueling a bubble.

To ensure Meta’s newly formed group has enough computing power to pursue cutting-edge AI models, the company is building massive data centers and signing cloud computing deals with companies such as: SeerGoogle and CoreWeave.

Zuckerberg said the company was seeing a “pattern” and it appeared Meta would need more power than initially anticipated. He said that growing artificial intelligence investments will pay off greatly over time.

“Being able to make a significantly larger investment here is very likely to be a profitable thing over a period of time,” Zuckerberg said on the call.

Zuckerberg said that if Meta overspends on AI-related computing resources, the company can repurpose capacity and profitably develop core recommendation systems “across our family of apps and ads.”

Along with its rivals, Meta has also raised its expectations for capital expenditures.

The company said capital expenditures this year will now be between $70 billion and $72 billion, compared to a previous estimate of $66 billion to $72 billion.

Meanwhile, Alphabet On Wednesday, it increased its capital spending range from $75 billion to $85 billion, from $91 billion to $93 billion. And then Microsoft’s The software company said it expects capex to accelerate in 2026 after previously predicting growth would slow.

Of the three companies, Alphabet was the only one to see its shares rise, with shares rising 6% in extended trading. Meta shares fell nearly 8% and Microsoft was down more than 3%.

Zuckerberg floated the idea that if Meta had excess computing power, it could offer some of it to third parties. But he said that wasn’t an issue yet.

“Obviously, if you get to a point where you’re overbuilding, you can consider that as an option,” Zuckerberg said.

Zuckerberg said that “in the worst case” Meta would end up with several years of excess data center capacity. He said this would lead to “loss and depreciation” of certain assets, but that the company would “grow and use it over time.”

As it stands today, Meta’s advertising business continues to grow at a healthy pace, thanks in part to investments in artificial intelligence.

“We’re seeing returns in the core business that give us confidence that we need to invest a lot more, and we want to make sure we don’t,” Zuckerberg said.

Revenue in the third quarter rose 26% year over year to $51.24 billion; This topped analysts’ estimates of $49.41 billion and represented the company’s fastest growth rate since the first quarter of 2024.

WRISTWATCH: Meta reports that third-quarter earnings passed, with the company taking a one-time tax charge.