New Delhi: Meta Platforms has announced a massive increase in capital spending as it accelerates its push toward what CEO Mark Zuckerberg calls ‘personal superintelligence.’ The Instagram and Facebook parent said it plans to lift capital expenditure by 73% this year, driven by heavy investments in artificial intelligence infrastructure and data centers.
Investors welcomed the move. Meta shares surged about 10% in extended trading after the company reported a strong December-quarter performance, including a 24% rise in advertising revenue. The company also issued an upbeat first-quarter revenue forecast, reinforcing confidence that its core ad business can bankroll its ambitious AI expansion, reported by Reuters.
Capex to reach up to $135 billion in 2026
Meta said it expects capital expenditure in 2026 to land between $115 billion and $135 billion, well above market expectations and sharply higher than last year’s spending. The increase will be led by data center construction, higher depreciation on AI assets, payments to third-party cloud providers, and rising infrastructure operating costs.
The company is building multiple large-scale AI data centers to meet soaring computing demand. It has also signed capacity agreements with partners including Google, CoreWeave, and Nebius. Chief Financial Officer Susan Li warned that Meta will face capacity constraints through much of 2026 as it races to expand its infrastructure.
Advertising engine funds AI ambitions
The advertisement business has been the pillar in the strategy of Meta. There was an increase in the ad revenue to $58.14 billion in the fourth quarter, which provided the firm with the cash flow to cover the AI bills that were increasing. But the growth in capital spending is becoming larger than the increase in revenue, which is straining the profitability. The operating margins were declining due to increase in infrastructure costs.
The company has also diversified its monetization, launching ads on WhatsApp and Threads, still trying to promote Instagram Reels in the rapidly expanding short-video market against TikTok and YouTube Shorts.
Rising costs and a fierce talent battle
Meta projects total expenditures of between $162 and $169 billion in 2026, which is a significant increase compared to the previous year. One of the driving forces is employee pay because the firm spends a lot in order to hire the best AI researchers and engineers. Zuckerberg has also restructured the AI initiatives at Meta through a specific unit, and this has heightened talent rivalry in Silicon Valley.
In the present quarter, Meta projects a revenue of between $53.5 billion and $56.5 billion, which is well above the estimates of Wall Street. Although the results of generative AI are still emerging, according to analysts, the core ad business of Meta still generates high cash flow, allowing the company to invest heavily in its long-term AI strategy.