Meta’s Massive AI Spending Sparks Investor Concerns Despite Strong Earnings

Hadisur Rahman, JadeTimes Staff

H. Rahman is a Jadetimes news reporter covering Business

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Image Source: Getty / Futurism

Meta CEO Mark Zuckerberg is doubling down on artificial intelligence, with the company set to spend an astounding $70 billion to $72 billion on AI development this year. The updated figure, revealed during Meta’s recent earnings call, exceeds its previous projection of $66 billion to $72 billion and highlights Zuckerberg’s aggressive push to position Meta at the forefront of the AI revolution.

However, this ambitious spending spree has rattled investors. Meta’s stock plunged over 11 percent on Thursday, even as the company reported higher-than-expected revenues. The sharp decline reflects growing anxiety among shareholders over Meta’s ability to convert its colossal AI investments into tangible returns.

Industry analysts are voicing similar concerns. “The total dollar spend is just kind of what hangs us up a little bit,” said Brian Mulberry, portfolio manager at Zacks Investment Management. He noted that investors need to see clearer evidence of how Meta’s AI investments will eventually boost profitability.

The sentiment underscores a larger unease sweeping through the tech sector, as rivals like Alphabet and Microsoft also ramp up AI spending to unprecedented levels. The surge in capital commitments has sparked fears of an AI bubble that could have far-reaching economic consequences if it bursts.

Despite the skepticism, Zuckerberg remains undeterred. He insists that early signs of AI-driven growth justify the spending. “We’re seeing the returns in the core business,” he said. “That’s giving us confidence that we should be investing a lot more.”

Meta has been aggressively recruiting top AI talent and investing billions in startups, including a $14 billion stake in Scale AI. Yet recent job cuts within its AI division hint that challenges may already be emerging behind the scenes.

As the race to dominate AI intensifies, Meta’s high-risk, high-reward strategy may define not only its own future but also the trajectory of the entire tech industry.