META
Zuck’s expensive “maybe”
Meta says it could rent out some of its AI computing power while still using most of it to build its own products. Investors are less convinced.
The company is spending billions on chips, servers, energy and data centres.
This pushed its second-quarter free cash flow down 91% to $784 million, sending shares down more than 9%.
Mark Zuckerberg said computing power is a valuable resource that Meta should keep building.
However, he also revealed that other companies have offered to rent its spare capacity at high prices.
Renting it out could bring in extra money, but it could also limit the resources available for Meta’s own AI models and services.
Meta is competing with Microsoft, Alphabet and Amazon, which already make money by selling cloud computing to businesses.
Meta still relies heavily on advertising from Facebook and Instagram.
Here’s what you should know:
Meta’s free cash flow fell 91% as AI spending increased.
Renting computing power could create a new revenue stream.
Investors still want clearer proof that the spending will pay off.
Welcome to GPU Airbnb
Zuckerberg believes consumer AI assistants and business agents could eventually become major products.
However, Meta has shared few details on how these services will cover its huge spending.
The investment has also reminded some investors of Meta’s costly metaverse push, which has yet to become a major source of revenue.
Despite the concerns, Meta increased its spending forecast to between $130 billion and $145 billion.
Want to slide a few million my way, Zuck? - MV