Meta Creates New Stock Class to Fund $18 Billion AI Push

Meta is introducing a new type of share designed to raise capital for its artificial intelligence initiatives while ensuring that the company's current voting structure remains intact. The social media giant confirmed reports that it plans to issue non-voting stock, which grants owners no say in corporate decisions, to finance the development of its AI technologies.

The details regarding this financial maneuver were shared by Meta's chief financial officer, Susan Li, during the company's third-quarter earnings call held Wednesday. Li explained that the organization intends to create a new class of non-voting capital stock to be distributed as a dividend to all current shareholders. She noted that this new stock class would be utilized for capital raising, employee compensation, and acquisitions.

Li stated that the creation of these shares would allow the company to expand its funding tools and provide flexibility to invest in the momentum seen across the business, driven by AI, while maintaining the current founder-led structure. This approach ensures that the voting power of existing Class A and B shareholders is preserved, preventing current leadership from losing control of decision-making processes.

The financial strategy coincides with a period of significant growth for the company. Meta reported $64 billion in revenue for the most recent quarter, marking a 26% increase compared to the previous year. While revenue grew, the company's costs and expenses also rose by 68% year-over-year, highlighting the expense associated with the company's current trajectory.

A major contributor to these expenses has been the company's aggressive push into artificial intelligence over the past year. The company has released several AI models, including Muse Spark and Muse Glimmer, as well as Muse Wonder and Muse Spark Open, an open-weight model whose underlying parameters are publicly available for outsiders to use and build on. Meta also launched a coding agent for software developers called Muse Code.

CEO Mark Zuckerberg addressed the adoption of these tools on the earnings call, stating that in just a month and a half, over 10 million people in the United States and Canada have set up Muse personal agents. He noted that the product has clear product-market fit and that the company is entering a new phase focused on scaling it.

While the company seeks to raise funds for AI, other parts of the business face financial headwinds. Reality Labs, the division responsible for AR glasses and VR headsets, continues to lose money, though less than it used to. The company expects losses for that division to be between $18 billion and $19 billion.

In addition to financial costs, the company also faces ongoing regulatory and legal issues. Li commented on active legal and regulatory matters that could significantly impact business and financial results, specifically mentioning scrutiny on youth-related issues in several markets and a number of youth-related trials scheduled in the coming months in the United States.