Oct 26 (Reuters) - Meta Platforms said on Monday it plans to raise up to $95 billion in its largest-ever equity fundraising, as the social media giant spends aggressively on its costly AI infrastructure expansion.
The Facebook parent has launched public offerings worth about $35 billion in common and preferred stock, and said it also plans to launch a separate at-the-market share sale program worth up to $60 billion.
The company will launch the larger share sale program after its new non-voting Class
C shares begin trading, which is expected in the first quarter of 2027, but said it has not yet finalized its timing and terms of the sale.
Meta's fundraising plan, which would rank among the biggest by an AI company, has also drawn interest of up to $5 billion in total from Nvidia, Advanced Micro Devices and Broadcom for Class A shares.
Their funding interest adds to concerns about an increasingly circular flow of capital in the AI industry, as chip suppliers help finance the expansion of one of their biggest customers. Meta has been pouring money into chips and data centers to compete better with OpenAI and Anthropic.
Its latest fundraising further underscores a shift among big technology companies increasingly tapping debt markets and raising equity to bolster their AI infrastructure, having previously relied on cash to fund their investments.
Earlier this year, Alphabet increased the size of its equity offerings to $84.75 billion.
Separately on Monday, SpaceX said an affiliate of Apollo Global Management will buy AI chips and server hardware and lease them to the rockets-to-AI firm, in a deal with total principal payments of about $40 billion.
META'S AI SPENDING IS BURNING CASH
Mark Zuckerberg-led Meta has committed to spend about $825 billion in the future, primarily driven by its growing investments in data centers, AI-related infrastructure and cloud computing power.
But the aggressive expansion has eroded its historically strong free cash flow.
The company reported a $2.12 billion cash burn in the third quarter, its first negative free cash flow in over a decade, compared with a positive cash flow of $10.63 billion a year ago.
Still, the early popularity of its consumer-focused AI agent Muse and release of a competitive new series of AI models have helped partly justify Meta's aggressive investments, although some enterprises are restricting Muse's access over security concerns.
The company had cash, cash equivalents and marketable securities of $82.45 billion, while it had long-term debt of $80.92 billion as of September 30, according to its latest quarterly filing.
Last week, Meta raised the lower end of its annual capital expenditure forecast to a range of $135 billion to $145 billion from its earlier outlook between $130 billion and $145 billion.
The company has said it would issue Class C common stock in January 2027, effectively resulting in a two-for-one split, to fund acquisitions and retain top talent while maintaining CEO Mark Zuckerberg's control.
The social media giant agreed to grant Zuckerberg Class C shares that he can sell to help pay a potential California billionaire wealth tax, in exchange for a commitment to keep him in California and preserve his voting control.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Leroy Leo)
