Meta bets $64 billion on AI with new non-voting shares

Meta is rewriting its financial rulebook to bankroll an AI empire.

On Wednesday, the company confirmed it will issue a new class of non-voting stock to help finance its massive push into artificial intelligence. This move was revealed during the third-quarter earnings call, validating reports that the tech giant is seeking fresh ways to fund its ambitious projects without diluting the voting power of its current shareholders. The new shares will be distributed to all existing owners as a stock dividend, creating a publicly traded instrument that can be used for raising capital, compensating employees, and executing acquisitions.

CFO Susan Li explained that the primary goal is to preserve the company's founder-led structure while expanding its funding tools. Li stated that the new shares are designed to give the company flexibility to invest behind the unprecedented momentum driven by AI across its business. By separating voting rights from equity ownership, Meta aims to maintain control while accessing the liquidity needed to support its rapid growth in a competitive tech landscape.

The financial backdrop for this strategic shift is robust. Meta reported $64 billion in revenue for the quarter, marking a 26% increase from the same period last year. However, this growth came with a significant price tag, as costs and expenses surged by 68% year-over-year. Despite these rising expenditures, the company beat Wall Street expectations, signaling that investors remain confident in its long-term strategy.

The Reality Labs division, which handles augmented reality glasses and virtual reality headsets, continues to operate at a loss, though the deficit is narrowing. The company expects these losses to shrink from 2025 levels to a range between $18 billion and $19 billion. This trajectory suggests that while the hardware business remains a drain on resources, it is becoming less of a financial burden than in previous years.

Meta’s AI efforts have accelerated dramatically over the past year. The company released several models, including Muse Spark and Muse Glimmer earlier this year. More recently, it added Muse Wonder and Muse Spark Open, the latter being an open-weight model that allows external developers to access its underlying parameters. Meta also introduced Muse Code, a specialized agent for software developers, and unveiled a line of avatars for its AI assistant, Meta Muse, aiming to make the technology more relatable and meme-able.

The market response to these AI products has been strong. CEO Mark Zuckerberg noted that in just six weeks, more than 10 million people in the U.S. and Canada have set up Muse personal agents. He described the growth as robust, noting that the app has remained number one in the App Store nearly every day. Zuckerberg indicated that with clear product-market fit established, the company is entering an operational phase focused on scaling the service to eventually serve billions of users.

Despite the positive momentum, Li warned that regulatory and legal challenges persist. She noted that the company is monitoring active matters that could impact its financial results, particularly regarding youth-related issues. Several trials concerning these matters are scheduled in the coming months in the United States, posing a potential headwind to the company's otherwise strong performance.