Meta raises spending forecast to $US145b in AI push
Meta Platforms increased its annual capital spending forecast by doubling down on its decision to pour billions of dollars into AI infrastructure, even as it tries to cut costs with planned layoffs.
Facebook’s parent company projects capital spending of between US$125 billion and US$145 billion in 2026, compared to the previous forecast of US$115 billion to US$135 billion.
The company’s shares fell around five percent in extended trading.
The company also warned that legal and regulatory impacts in the EU and US “could materially affect our business and financial results.”
“We continue to see scrutiny in youth-related issues and additional trials are planned in the United States this year, which could ultimately result in financial loss,” the company said.
Meta reported first-quarter revenue of $56.31 billion, beating the $55.45 billion average estimate of analysts compiled by LSEG.
It expects second-quarter revenue to be between US$58 billion and US$61 billion, largely in line with forecasts of US$59.5 billion.
Family daily active people (DAP), a metric Meta uses to track unique users who open any of its apps in a day, rose four percent to 3.56 billion in the first quarter from a year earlier.
The results come weeks after Reuters first reported Meta’s sweeping layoff plans, as CEO Mark Zuckerberg sought to aggressively integrate artificial intelligence into the company’s workflows and reshape its workforce around the technology.
Meta, which owns Instagram, WhatsApp and Threads, spends heavily on AI infrastructure and high compensation for employees, such as those working at Meta Super Intelligence Labs, which launched its first AI model called Muse Spark earlier this month.
The company’s powerful advertising platform, which offers advertisers tools to automate and personalize their campaigns, has continued to be the company’s growth engine and has helped support investments in AI infrastructure.
Meta intensified competition with platforms like Elon Musk’s X by running ads on messaging service WhatsApp and microblogging platform Threads last year. Simultaneously, Instagram’s Reels continues to compete with TikTok and YouTube Shorts in the lucrative short video market.
Meta is expected to overtake Alphabet as the world’s largest online advertiser for the first time this year, with global net advertising revenue of $243.46 billion, excluding traffic acquisition costs. The forecast by research firm Emarketer shows annual ad revenue for Google and YouTube parent company will be $239.54 billion.
Last week, the company expanded the availability of its Meta AI job assistant, designed to help advertisers optimize campaign performance and resolve technical issues through real-time guidance.
Meta is installing new monitoring software on U.S.-based employees’ computers to capture mouse movements, clicks and keystrokes to train AI models, Reuters reported last week; This is part of a broader initiative to create AI agents that can perform job tasks autonomously.
Meanwhile, China ordered Meta to withdraw its US$2 billion acquisition of artificial intelligence startup Manus on Monday as Beijing tightened scrutiny of US investments in domestic startups developing pioneering technologies.
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