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Back in the mid-2000s, Mark Zuckerberg had a pretty awesome product: a site called Facebook, which was still widely loved and not polluted with endless ads and scams.<\/p>\n
The interceding years have been hard on Zuckerberg\u2019s empire. From a disastrous, multibillion-dollar foray<\/a> into a pandemic-era virtual reality world nobody wanted to step a foot into to effectively abandoning content moderation and allowing demented AI slop<\/a> to flood its social media platforms, Meta now feels more like a dilapidated strip mall than a hot tech property. <\/p>\n Lately, it almost feels like Zuckerberg is trying to destroy his own company. He\u2019s burning through mountains of cash in a desperate attempt to keep up in the AI race. Yet despite the untold billions it\u2019s spent so far, it\u2019s being destroyed by OpenAI and Anthropic. Its employees have even resorted to using AI models made by its competitors<\/a>, a humiliating reality check for how far behind Zuckerberg\u2019s efforts have fallen.<\/p>\n It\u2019s also a financial nightmare. Capital expenditures have risen dramatically, erasing any appetite for Meta on Wall Street. Its stock price \u201chas been dead money for more than a year,\u201d as Yahoo Finance notes<\/a>, as investors continue to debate whether Zuckerberg is chasing the AI industry as it careens off a cliff \u2014 or edging ever closer to an AI-fueled industrial revolution.<\/p>\n This week\u2019s second quarter earnings, in particular, will serve as one of the biggest tests in Meta\u2019s recent history. Another major hike in AI spending \u2014 which is looking likely, given Zuckerberg\u2019s recent doubling down and soaring AI data center costs \u2014 could send its already flagging shares sinking even further.<\/p>\n It\u2019s a precarious moment for the industry as concerns over a massive AI bubble<\/a> once again grip shareholders. The news comes after Alphabet shocked skeptical investors by raising its spending forecast<\/a> past the $200 billion mark last week, indicating that Zuckerberg may try something similar.<\/p>\n \u201cPrior to Alphabet recently raising FY26 capex guide, we think there were limited expectations for Meta to increase its current 2026 guidance of $125-$145 billion,\u201d Deutsche Bank analyst Benjamin Black wrote in a note. \u201cHowever, now, it is likely investors fear an increase in FY26 outlook likely may be coming.\u201d<\/p>\n The debt keeps piling up as companies eye even bigger AI data center build-outs. As the Wall Street Journal reports<\/a>, Meta executives told bankers and fund managers that it\u2019s looking to raise even more cash \u2014\u00a0in the \u201chundreds of billions of dollars\u201d \u2014 to support the plans.<\/p>\n Meanwhile, spiking demand and steady interest rates have caused construction costs to soar, making these funding rounds an even bigger ask for tech execs.<\/p>\n Despite the massive AI spending, Zuckerberg appears to be painfully aware he\u2019s likely steering the company in the wrong direction<\/a>. Earlier this month, he conceded to staff during a town hall<\/a> that the \u201ctrajectory of the agentic development over at least the last four months hasn\u2019t really accelerated in the way that we expected.\u201d<\/p>\n Meta has also been struggling with rock-bottom morale<\/a>. Despite earmarking over $100 billion on AI infrastructure, the company has been laying off thousands of workers<\/a> in an apparent effort to replace them with the tech.<\/p>\n During the town hall, Zuckerberg admitted that the major culling were not \u201cclean,\u201d adding that bets on restructuring \u201chaven\u2019t come to fruition yet.\u201d<\/p>\n The company was also forced to halt<\/a> a highly controversial plan<\/a> to record everything workers do on their assigned computers to gather data for AI after leaking sensitive employee information.<\/p>\n