Reports Say Meta Considering Massive Equity Offering to Bet on AI, Stock Drops Over 6%
Alina Collins
The Financial Times reports Meta is considering a multi-billion-dollar share sale to bankroll its AI push — the stock fell more than 6% on the news, as the market questioned not AI itself but how much dilution shareholders would bear.
What is this reported deal?
The FT, citing three people briefed on the matter, says Meta is weighing a new share offering worth tens of billions of dollars to fund Mark Zuckerberg's AI buildout.
A Meta spokesperson called the report "pure speculation" but added the company "will continue to raise capital in the most flexible way." This means → Meta denied a specific plan, not the intent to raise money.
The sources also cautioned it is "too early" to say a decision has been made — Meta has not hired underwriters and may ultimately not issue shares.
Why is this surfacing now?
The immediate trigger: Alphabet just completed an $85 billion equity raise, upsized from $80 billion on strong investor demand.
Meta executives recognise that if they want to sell stock, they must move quickly — the current U.S. equity-capital market is historically active, and the window and investor appetite could be consumed by first movers.
In plain terms = Alphabet already took a large bite out of the market's appetite; Meta needs to act before the market is full.
Where would the money go?
Meta's AI capital-expenditure plan for this year stands at $145 billion, raised from an earlier high of $135 billion, with further increases planned for 2027.
Meta, Amazon, Google and Microsoft together expect to spend more than $720 billion on AI in 2026 alone, with plans to increase in 2027.
Executives are studying Alphabet's "mandatory convertible preferred stock" — a tool that raises cash immediately but delays actual share issuance by several years. This means → Meta wants the money but fears instant dilution, so it is looking for a buffer mechanism.
Who is driving the process?
CFO Susan Li and Dina Powell McCormick — who moved from the board to the role of president in January — are jointly leading the potential-offering discussions.
Powell McCormick's core mandate: restructure how Meta finances its AI infrastructure for what the company calls its most capital-intensive phase ever.
She spent 16 years at Goldman Sachs, which was the lead underwriter on the Alphabet deal. This reflects Goldman's natural advantage in competing for a potential Meta mandate.
Is the AI spending producing revenue?
Talent: Zuckerberg spent roughly $14 billion on a "talent acquisition" of Scale AI; Scale AI CEO Alexandr Wang now serves as Meta's chief AI officer.
Product: Meta launched its Muse Spark model in April but, per the Wall Street Journal, has delayed the release of its API — developers cannot yet plug in.
Revenue: Meta is testing a subscription plan called "Meta One" across Instagram, WhatsApp, Facebook and Meta AI; Zuckerberg has also floated the idea of a Meta cloud-computing platform. Put simply = the spending pace is concrete; the revenue path is still at the "testing" and "concept" stage.
Why isn't the market buying it?
Meta's long-term debt ballooned from under $10 billion in 2022 to cumulative borrowings of $55 billion, including a single $27 billion bond for the "Hyperion" data centre built with Blue Owl.
The company is simultaneously cutting costs: last month it laid off 8,000 staff, froze 6,000 open roles, and at the end of 2025 suspended a share-buyback programme running since 2017. This means → debt expansion, headcount cuts and a buyback freeze are all happening at once — the room to manoeuvre is visibly narrowing.
Over the past 12 months, Alphabet's stock has risen more than 115% while Meta's has fallen 13%. This reflects Wall Street's core disagreement: Alphabet's fast-growing cloud business provides a direct commercial backstop for its capex, whereas Meta's AI spending has yet to show a quantifiable return on any foreseeable timeline.
Content is for reference only, not financial advice.