{"id":254365,"date":"2025-11-01T00:50:13","date_gmt":"2025-11-01T00:50:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/254365\/"},"modified":"2025-11-01T00:50:13","modified_gmt":"2025-11-01T00:50:13","slug":"meta-stock-plummets-as-investors-horrified-at-how-much-zuckerberg-is-spending-on-misfired-ai","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/254365\/","title":{"rendered":"Meta Stock Plummets as Investors Horrified at How Much Zuckerberg Is Spending on Misfired AI"},"content":{"rendered":"

Mark Zuckerberg\u2019s Meta is spending untold billions on infrastructure<\/a> and top talent<\/a> for its AI ambitions.<\/p>\n

In fact, the CEO announced<\/a> during the company\u2019s earnings call on Wednesday, Meta will be spending between $70 billion and $72 billion on AI this year \u2014 up from its previous estimate of $66 billion to $72 billion, as CNBC reports<\/a>.<\/p>\n

Unsurprisingly, that cash bonfire isn\u2019t going over well with investors. Meta\u2019s shares slid by more than 11 percent on Thursday, indicating widespread skepticism about the company\u2019s ability to stop bleeding billions of dollars as it races to keep up with the AI industry\u2019s ever-escalating expenditure commitments.<\/p>\n

That\u2019s particularly striking because the drop comes in spite of Meta\u2019s revenues exceeding Wall Street\u2019s estimates. In other words, out of control AI spending is starting to rattle investors.<\/p>\n

\u201cThe total dollar spend is just kind of what hangs us up a little bit,\u201d Zacks Investment Management portfolio manager Brian Mulberry told the Wall Street Journal<\/a>. \u201cThey have to start doing a better job of showing us when that comes back to the balance sheet.\u201d<\/p>\n

Mulberry questioned Meta\u2019s ability to turn its ballooning expenditures into a return on investment.<\/p>\n

\u201cThe return on invested capital is definitely a huge metric for us and the fact that they are being a little bit cagey and not quite upfront with what exactly is going on doesn\u2019t help soothe those fears,\u201d he told the WSJ.<\/p>\n

The AI industry is seemingly approaching a major inflection point, with Meta competitors Alphabet, and Microsoft tripling down on AI by increasing their planned spending<\/a> to even loftier heights, fueling fears of a growing AI bubble<\/a> that could take down the entire US economy with it<\/a> if ever pops.<\/p>\n

In fact, a similar story to Meta\u2019s is playing out at Microsoft as well. The company reported better-than-expected results this week \u2014\u00a0only for its stock to slide almost three percent<\/a> as investors balked at the company\u2019s forecast to increase its spending.<\/p>\n

For Zuckerberg, it\u2019s a matter of acting now, before it\u2019s too late, highlighting a persistent fear of missing out among tech leaders.<\/p>\n

\u201cIt\u2019s pretty early, but I think we\u2019re seeing the returns in the core business,\u201d he told investors. \u201cThat\u2019s giving us a lot of confidence that we should be investing a lot more, and we want to make sure that we\u2019re not underinvesting.\u201d<\/p>\n

As such, Meta has been on an AI hiring spree this year, investing over $14 billion in AI startup Scale AI, and poaching its CEO, Alexandr Wang, to lead its so-called Superintelligence Labs. It\u2019s been given out pay packages ranging from tens of millions to more than $1 billion<\/a> in a desperate bid to attract talent.<\/p>\n

Then, as Axios reported<\/a> earlier this month, the company cut hundreds of roles<\/a> from its AI unit \u2014 suggesting that the cracks could be starting to show.<\/p>\n

More on Meta: Meta Tells Employees Their Jobs Are Being Automated<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Mark Zuckerberg\u2019s Meta is spending untold billions on infrastructure and top talent for its AI ambitions. In fact,…\n","protected":false},"author":2,"featured_media":254366,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[256,254,255,64,63,105],"class_list":{"0":"post-254365","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-au","12":"tag-australia","13":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/254365","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=254365"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/254365\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/254366"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=254365"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=254365"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=254365"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}