Meta equity raise of up to $95 billion puts AI spending on shareholders

Big Tech has mostly paid for the AI build-out with cash and bonds. The Meta equity raise announced on Monday changes that formula: the Facebook parent is asking stock investors to fund a large slice of its data center ambitions, with a plan that could reach $95 billion.

What happened

Meta launched two concurrent underwritten offerings worth about $35 billion in total, according to its press release. Roughly $22.5 billion is Class A common stock sold through forward sale agreements, and about $12.5 billion is depositary shares tied to a new Series A mandatory convertible preferred stock. The preferred shares are set to convert into common stock around Aug. 15, 2029, unless converted earlier.

The second leg is a planned at-the-market program of about $60 billion, to start once Meta's newly created Class C shares begin trading. Meta stressed that it has not signed any agreement for that program and that its size and timing are not fixed. The Guardian reported that Nvidia, AMD and Broadcom have shown interest as cornerstone investors in the first offering, potentially buying up to $5 billion of stock.

Because the forward sale structure delays settlement, Meta does not expect to receive proceeds from the common stock sale right away. It will collect when the forward agreements settle, which gives it some flexibility on timing. Underwriters also get 30-day options to buy extra shares: up to 37.5 million more depositary shares and up to $3.375 billion more common stock, according to the release.

Why it matters

The scale reflects the spending plan. Meta expects $135 billion to $145 billion of capital expenditures in 2026 and is building four superclusters with more than a gigawatt of capacity each, it said. Operating cash flow over January to September came to $97 billion, and Meta held about $82 billion in cash and marketable securities at the end of September, so the company is choosing equity as a complement to debt rather than out of necessity. The Guardian cited internal forecasts showing Meta needs to raise "hundreds of billions of dollars" over several years.

The Class C shares carry no votes, which lets Meta sell stock without diluting Mark Zuckerberg's control, the Guardian noted. We explained that structure when Meta unveiled its non-voting Class C stock, and the AI push behind it in our piece on Meta's Muse Wonder model.

Investors did not treat the Meta equity raise as a warning sign for the sector. Together with Anthropic's IPO filing, it rekindled the AI trade on Monday, CNBC said, as chip stocks led a rebound.

What's next

Pricing of the $35 billion offerings is the next milestone, followed by the Class C listing that unlocks the ATM program. Meta's Q3 revenue of $64.6 billion, up 26%, gives it room, but existing holders will face dilution as the Meta equity raise is executed. Terms are in Meta's press release.