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Meta is considering issuing hundreds of billions of new shares to raise funds to tackle $145 billion in AI expensesAccording to Sentinel Beating monitoring, following Google's parent company Alphabet's completion of an $850 billion equity financing this week, Meta is exploring raising billions of dollars through a new share issuance to address a potential AI capital expenditure of up to $145 billion this year.Three sources familiar with the matter revealed that the financing negotiations are being led by Chief Financial Officer Susan Li and newly appointed President Dina Powell McCormick, who took office in January. McCormick, who spent 16 years at Goldman Sachs, which also led this week's Google deal, has spearheaded the discussions. Meta has not yet hired an underwriting bank and may ultimately not issue new shares, with an official spokesperson stating that the rumors of a share issuance are purely speculative.To immediately access funds and delay equity dilution, Meta is considering a financing structure similar to Google's. Google's transaction involved the issuance of mandatory convertible preferred shares, allowing the issuer to secure funding upfront and convert to common stock after several years. Meta's management recognizes the need to act swiftly within the window of opportunity, in light of SpaceX's valuation potentially reaching $1.78 trillion next week with plans to raise $860 billion in an IPO, as well as Anthropic's confidential listing application and OpenAI's listing process, all of which may strain the liquidity of the U.S. stock market and investor enthusiasm. Competitors like Microsoft and Amazon are also evaluating share issuances to alleviate the pressure on their balance sheets from data center expansions.Prior to considering equity financing, Meta has primarily relied on cost-cutting measures and bond issuances to support its AI expansion, with long-term debt ballooning from under $10 billion in 2022 to nearly $550 billion recently. Meta also ceased its stock buyback program by the end of 2025 that had been in place since 2017 and laid off 8,000 employees last month, freezing 6,000 positions.
