The tech giant announced its fundraising plans Monday (Oct. 26), saying it planned to raise $35 billion in underwritten public equity offerings, before drumming up another $60 billion with an at-the-market program.
“Meta’s planned investments will support its continued momentum across its core business and emerging AI opportunities,” the company’s announcement said.
These include its “Family of Apps,” with platforms like Facebook and Instagram seeing record engagement thanks to “strong growth in video.”
The company also noted the growth of its Muse AI model, which attracted more than 10 million users in the U.S. and Canada in its first weeks. Meta says it also sees opportunities to serve “high-margin inference demand” for its business customers with the launch of the Meta Enterprise Platform and its advanced models, including Muse Wonder.
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PYMNTS wrote last week that Muse has become the “new centerpiece” in Mark Zuckerberg’s AI ambitions, with the Meta CEO positioning the model as “the foundation for everything from shopping and advertising to enterprise software and smart glasses.”
While previous AI efforts struggled to position Meta as a frontier leader in the field, Zuckerberg used the company’s recent earnings call to offer up Muse as proof its strategy is cohering. He noted that more than 25% of Muse users are daily users, with early engagement more than twice the level Threads reached at its launch.
“Muse is the product form of this vision,” Zuckerberg said, in reference to his ambition to deliver personal superintelligence.
However, the report said, Meta still faces a steep financial challenge, having spent $34.9 billion on capital expenditures for the quarter while reporting negative free cash flow of $2.1 billion.
“Muse is expensive to operate,” the report added. “Zuckerberg said Meta needs more than a tenfold improvement in compute efficiency over the next year to make the economics work at scale.”
The company has postponed a global rollout partially due to those costs and expects to monetize Muse earlier than its typical product playbook, and has not disclosed its current per-user operating cost, PYMNTS wrote.
The company reported $64.6 billion in quarterly revenue, up 26%, underscoring the advertising business’s role in financing that ambition.
“Zuckerberg is betting Muse can do more than revive Meta’s AI ambitions,” PYMNTS wrote. “He wants it to become the business that makes those investments pay off. Whether it can generate enough revenue to justify the spending remains unproven.”
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