Meta plans $95 billion AI funding package, with $60 billion still conditional

Meta announced an approximately $95 billion equity-financing plan for AI infrastructure on October 26. It launched roughly $35 billion of common-stock and convertible-preferred offerings and outlined another $60 billion market-sale program, dependent on trading beginning in its planned nonvoting Class C shares.

New issuance dilutes existing shareholders’ economic interests. The planned Class C shares carry no ordinary voting rights, so financial ownership and voting power change differently.

Of the current offerings, $22.5 billion involves Class A shares and forward-sale contracts. Financial counterparties borrow shares from third parties and sell them, with Meta settling later. The company expects no proceeds from that initial sale; money would arrive upon settlement at an adjusted forward price. Physical settlement involves new shares, potentially diluting earnings per share and return on equity.

The other approximately $12.5 billion offering uses depositary shares representing mandatory convertible preferred stock. Meta proposed 250 million depositary shares, each representing one-twentieth of a preferred share. Holders receive a corresponding fractional interest in dividend, conversion and liquidation rights.

The October 26 preliminary prospectus leaves the dividend rate and minimum and maximum conversion ratios blank. Unless converted earlier, the securities follow an August 2029 conversion schedule. Class C issuance and other conditions can change the conversion stock to Class C. The share count depends on volume-weighted average trading prices during a specified measurement period.

Voting rights and economic ownership

The October 21 shareholder statement sets January 19, 2027 for the amended charter to take effect. Each Class A or B share receives one Class C share; the board will set record and payment dates.

That initial dividend preserves relative economic interests and voting power. The statement warns that a Class C discount to Class A could require more shares in subsequent fundraising, increasing dilution.

The financing follows a quarter in which investment exceeded operating cash generation. Meta’s October 21 results reported $34.91 billion in third-quarter capital expenditure, including finance-lease principal payments, against $32.79 billion operating cash flow. Its reported free cash flow was negative $2.12 billion. Cash, equivalents and marketable securities totaled $82.45 billion at September 30. The company raised the lower end of its 2026 capital-spending forecast from $130 billion to $135 billion, retaining a $145 billion upper limit. Quarterly revenue rose 26% to $64.601 billion. Meta says its 2027 budget remains under development, with continued investment planned for core operations and emerging AI initiatives.

Its quarterly filing separately lists $355.73 billion of leases not yet commenced at September 30, covering data centers, energy and network infrastructure, with commencement dates through 2036 and terms longer than one year through 30 years. Another $454.52 billion of noncancelable contractual commitments includes external cloud capacity, servers, energy and Reality Labs consumer hardware. Payments on those commitments include $45.85 billion in 2026 and $121.41 billion in 2027. The filing also identifies $10.80 billion of restricted escrow cash, scheduled for release during 2028–2030 as purchasing obligations are satisfied.

NVIDIA, AMD and Broadcom indicated interest in buying up to $5 billion of the Class A offering combined. The common-stock prospectus makes clear those indications are nonbinding. Meta plans one or more forward-sale settlements by November 19, 2027.

Meta expects the additional $60 billion program in the first quarter of 2027, following commencement of Class C trading. Meta says it has signed no agreement for that program and its precise timing, size and terms remain undetermined.