1 month ago
Meta’s Free Cash Flow Drops 91% as AI Spending Soars
Meta, the company that owns Facebook and Instagram, spent a lot of money on new computer technology to help its artificial‑intelligence programs learn.
Because of this, the money it had left after paying its bills fell a lot, from $8.55 billion to just $784 million.
But the company still made more money from ads, up 28% to $60.8 billion.
The CEO said the new AI tools could become big businesses in the future.
Investors were worried and the stock price fell about 10% after the earnings report.
Meta plans to spend up to $145 billion on AI this year, which is double what it spent last year.
Meta’s Q2 free cash flow fell 91% to $784 million due to AI investment.
Revenue rose 28% to $60.8 billion, driven by a strong advertising business.
CEO Mark Zuckerberg said AI will create new profitable businesses, including personal agents.
Investors reacted negatively, shares fell 10% in after‑hours trading.
Meta plans to spend up to $145 billion on AI infrastructure this year, doubling last year’s spend.
- Who
- Meta Platforms, Inc. and its CEO Mark Zuckerberg
- What
- Meta reported a 91% drop in free cash flow while revenue grew 28% due to AI spending
- Where
- Meta’s global operations
- When
- Q2 2024 (quarter ended June 30, 2024)
- Why
- Heavy investment in AI infrastructure and computing power
Key facts
- Free cash flow (Q2 2024)
- $784 million
- Revenue (Q2 2024)
- $60.8 billion
- AI investment (2024)
- $145 billion
- Share price reaction
- 10% drop after hours
- CEO
- Mark Zuckerberg
Quotes
Mark Zuckerberg
CEO of Meta
“We expect that a significant portion of our compute is going to go towards training our models, growing our core business and delivering personal agents and new products, but we also expect to grow a large business serving large customers as well.”
financialexpress.com
“Meta’s AI spend was easier to celebrate when margins were expanding. It’s harder to celebrate now that the costs are showing up in the numbers.”
financialexpress.com
Sources
Related news
Big Tech to Spend $740 Billion on AI This Year
AI Boom Spending Hits $165 Billion as Cash Flow Shrinks
SpaceX Shares Plunge 13% as AI Spending Overshadows Earnings Beat
Meta Quietly Emerges as Microsoft’s Major AI Customer
Alibaba Profit Plunges as AI Spending Weighs on Shares
Meta Shelves Second AI Restructuring Wave After Employee Pushback
Meta Scales Back VR Ambitions Amid Slower Adoption
Meta Cuts 1500 Reality Labs Jobs
L&T Realty Acquires Mumbai Land for ₹448.6 Crore
Meta Cuts 1,000 Reality Labs Jobs
