Meta Shares Decline on Zuckerberg's AI Investment Strategy and Revenue Projections

Meta Platforms Inc. saw its shares decrease by 11% in pre-market trading, a reaction to CEO Mark Zuckerberg's detailed outline of the company's aggressive artificial intelligence (AI) investment strategy. This downturn wiped approximately $140 billion from Meta's market capitalisation.

Zuckerberg informed analysts of plans to increase spending significantly on AI infrastructure, including the acquisition of 350,000 Nvidia H100 graphics processing units by the end of 2024. These investments are projected to drive capital expenditure to between $35 billion and $40 billion this year, up from an earlier estimate of $30 billion to $37 billion.

Simultaneously, Meta issued a revenue forecast for the current quarter ranging from $36.5 billion to $39 billion, falling short of analysts' average expectation of $38.3 billion. This guidance, coupled with the substantial AI outlays, prompted investor concern regarding the immediate profitability implications of the company's long-term AI vision.

A significant development highlighted by Zuckerberg was Meta's intention to begin selling its AI tools to other companies. This move signifies a strategic shift, positioning Meta not only as a consumer of AI technology but also as a commercial provider, seeking to monetise its substantial research and development in the field.