Meta Platforms has warned investors to expect a sharp rise in capital expenditure next year, as the social media giant ramps up investment in artificial intelligence and builds out vast new data centres to power its AI ambitions.
The parent company of Facebook, Instagram, and WhatsApp reported a 26% year-on-year increase in revenue for the third quarter of 2025, surpassing Wall Street expectations. However, that growth was overshadowed by a 32% jump in overall costs, prompting shares to fall 8% in after-hours trading.
Meta also posted a one-time charge of nearly $16 billion related to US President Donald Trump’s “Big Beautiful Bill,” which slashed quarterly profit to $2.71 billion. Excluding the charge, net income would have risen to $18.64 billion.
After entering the AI race later than rivals Microsoft and Alphabet, Meta is now spending aggressively to catch up. Chief Executive Mark Zuckerberg said the company is preparing for what he called the “superintelligence era” — a theoretical point at which AI systems surpass human cognitive abilities.
“There’s a range of timelines for when people think we’ll get superintelligence,” Zuckerberg told analysts. “I think it’s the right strategy to aggressively front-load building capacity so we’re prepared for the most optimistic cases.”
The company has pledged to spend “hundreds of billions” on AI data centres to meet growing computing demands. If progress toward superintelligence slows, Zuckerberg said Meta could redirect its expanded computing power to strengthen its advertising and social media businesses.
Analysts say the company’s renewed focus on scaling its AI capabilities is already improving its ad tools and video recommendation systems. “After a few years of existential hand-wringing, the company has found its rhythm again,” said Jeremy Goldman, senior director at Emarketer. “Meta has quietly turned AI into margin.”
Meta’s CFO Susan Li said employee compensation will be a major driver of rising costs next year, reflecting a wave of AI-related hiring across 2025. Meta recently consolidated its AI efforts under a new division, “Superintelligence Labs,” and is one of the largest buyers of Nvidia’s high-performance AI chips.
The company also lifted the lower end of its 2025 capital expenditure forecast to between $70 billion and $72 billion, up from its previous range of $66 billion to $72 billion.
Industry-wide, AI infrastructure spending is surging. Alphabet, Microsoft, and OpenAI have all announced major expansions this week, underscoring the fierce competition — and financial pressure — within the AI sector.
Despite heavy spending, Meta’s core business remains robust. The company said more than 3.5 billion people used at least one of its apps daily in September, helping drive advertising growth. It has also expanded monetisation on WhatsApp and Threads, while Instagram Reels continues to compete head-on with TikTok and YouTube Shorts.
Meta forecast fourth-quarter revenue between $56 billion and $59 billion, broadly in line with market expectations.
