Meta Enters Cloud Market with AI Computing Services
Meta Platforms Inc. is developing plans for a cloud infrastructure business that will sell access to AI computing power and models, setting up a new vector of competition with industry leaders like Amazon Web Services, Microsoft Azure, and Google Cloud. The move comes as Meta rushes to secure expensive data centers and other infrastructure to fuel its own artificial intelligence ambitions.
According to people familiar with the matter, Meta is forming a business to generate revenue from excess computing power sold to outside customers. The details are not yet public, and the plans are still in development.
Potential Offerings: AI Models and Raw Computing Capacity
One potential plan includes selling access to various AI models hosted on Meta’s existing AI infrastructure, similar to AWS’s Bedrock offering. Meta would run the data centers and chips that power the models, including its own Muse Spark models, and charge developers to access them. The company is also considering selling access to “raw” computing capacity, akin to other neocloud businesses like CoreWeave Inc.
Development of these new business lines is part of Meta Compute, an internal initiative led by Santosh Janardhan, Meta’s head of infrastructure; Daniel Gross, a leader inside the Meta Superintelligence Labs AI unit; and Meta President Dina Powell McCormick. A Meta spokesperson declined to comment, and the strategy could change.
Market Reaction and Competitive Landscape
Shares of Meta jumped 9.3% to US$615.55 at 10:04 a.m. in New York on Wednesday, the biggest intraday gain since April. In contrast, CoreWeave fell as much as 14%, and Nebius Group NV, a Dutch AI data center company, fell as much as 17%. The demand for computing power from major AI developers remains insatiable, and Meta’s entry into the cloud market offers a way to return some of its massive investment in AI infrastructure.
Meta has committed hundreds of billions of dollars to data centers and AI infrastructure, including major computing deals with CoreWeave, Alphabet Inc.’s Google, and Oracle Corp. A cloud business provides a means to capitalize on the broader AI boom, similar to AWS, Azure, and Google Cloud, which generate tens of billions of dollars per quarter in revenue from renting access to computing power, storage, and software.
