Meta's New Stock Plan for Its AI Spending

Meta is building out its AI capabilities on a massive scale, and it needs a way to pay for it. On Wednesday, alongside its third-quarter earnings report, the company confirmed it is developing a new type of stock. This new class of shares would be distributed to current shareholders as a dividend. The plan, first reported by Semafor, is designed to raise capital for Meta's AI initiatives.

Meta's chief financial officer, Susan Li, confirmed the plan during the earnings call. She said the company will "create a new class of non-voting capital stock, which will be distributed to all existing shareholders through a stock dividend." This new stock would be publicly traded and used for capital raising, employee compensation, and acquisitions, among other corporate purposes. The key detail is that these shares carry no voting rights. Li explained that this structure allows Meta to raise funds while "preserving the voting power of existing Class A and B shareholders." She added that maintaining this "founder-led structure" is a primary goal of the new stock class.

The need for new funding tools comes as Meta's financial picture shows both strong growth and rising costs. The company reported $64 billion in revenue for the quarter, a 26% jump from the same period last year, which beat Wall Street's expectations. However, costs and expenses rose much faster, climbing 68% year-over-year. The company's Reality Labs division, which develops AR glasses and VR headsets, also continues to post losses, though it expects them to shrink to between $18 billion and $19 billion for the year.

This financial push is happening as Meta releases a rapid succession of AI products. Recent additions include the Muse Wonder and Muse Spark Open models, as well as a coding agent for developers called Muse Code. The company's AI assistant, Meta Muse, has also been updated with a new line of avatars. CEO Mark Zuckerberg reported that user adoption for these tools is strong, stating that "more than 10 million people in the U.S. and Canada have set up Muse personal agents" in about a month and a half. He also noted that the product has been number one in the App Store almost every day.

While the company is focused on scaling its AI products, it is also facing ongoing challenges. Li pointed to significant legal and regulatory matters that could impact its business. This includes scrutiny on youth-related issues in several markets. She also said that a number of youth-related trials are scheduled in the United States in the coming months.