Meta's $25 Billion AI Bond Bet: Zuckerberg Goes All?In on the Next Tech Race

This article first appeared on GuruFocus.

Meta Platforms (NASDAQ:META) is gearing up for one of the largest corporate bond offerings of the year, aiming to raise at least $25 billion in investment-grade debt. The move comes just a day after CEO Mark Zuckerberg warned investors that spending on artificial intelligence will accelerate further in the coming year. The deal, managed by Citigroup and Morgan Stanley, could rival Mars Inc.'s $26 billion issuance earlier this year. According to people familiar with the matter, Meta plans to sell bonds across as many as six tranches ranging from five to forty years, with the longest yielding around 1.4 percentage points above comparable Treasuries. Proceeds are expected to support general corporate purposes, giving Meta additional firepower to fund its AI expansion.

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Zuckerberg's playbook is becoming clearer: spend heavily now to build an AI foundation that could define Meta's next decade. The company expects capital expenditures of up to $72 billion this year, with spending growth in 2026 set to accelerate even faster. That cash will power new data centers, custom infrastructure, and AI integration across its core platforms Facebook, Instagram, and beyond. To further secure its infrastructure base, Meta recently helped finance a $30 billion data center in rural Louisiana through a joint venture with Blue Owl Capital and Pimco, with Blue Owl holding an 80% stake and Pimco acting as anchor lender.

Investors, however, are reacting with caution. Meta's shares slipped 12% on Thursday, reflecting concern over short-term cash burn despite the long-term promise of its AI strategy. With rivals like Alphabet (NASDAQ:GOOG) and Microsoft (NASDAQ:MSFT) also escalating their AI spending, the competitive bar keeps rising. For Meta, this bond sale isn't about defense it's a statement of intent. The company appears determined to outbuild and outlast its peers in what could be the most capital-intensive technology cycle since the birth of social media.

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