Meta Announces Massive 73% Increase in AI Capital Spending for 2026
In a bold strategic move, Meta has revealed plans to dramatically increase its capital expenditure for 2026, with a 73% boost that could reach up to $135 billion. This substantial investment is primarily directed toward advancing the company's artificial intelligence infrastructure and pursuing what CEO Mark Zuckerberg describes as "personal superintelligence" for its massive social media user base.
Financial Forecasts Exceed Expectations
The announcement came alongside quarterly results that surpassed Wall Street predictions, sending Meta shares soaring nearly 9% in extended trading. The company reported better-than-expected profit and revenue for the quarter ending December 31, while forecasting first-quarter revenue between $53.5 billion and $56.5 billion—significantly above analysts' average estimate of $51.41 billion.
Meta's capital expenditure for 2026 is projected to range between $115 billion and $135 billion, a substantial increase from the $72.22 billion spent last year and well above the $109.9 billion budget anticipated by analysts. This aggressive spending plan is driven by several key factors:
- Infrastructure costs including payments to third-party cloud providers
- Higher depreciation of AI data center assets
- Increased infrastructure operating expenses
- Rising employee compensation as Meta competes for top AI talent
The Push Toward AI Superintelligence
Zuckerberg emphasized on a conference call with analysts that "this is going to be a big year for delivering personal superintelligence, accelerating our business infrastructure for the future and shaping how our company will work going forward." The company's total expenses for 2026 are expected to reach between $162 billion and $169 billion, up from $117.69 billion the previous year.
This spending surge comes amid intense competition in Silicon Valley's AI race, where Meta has faced challenges following the disappointing reception of its Llama 4 model. The company is now betting heavily on new AI models launched internally this month, while simultaneously building several gigawatt-scale data centers across the United States.
Infrastructure Expansion and Strategic Shifts
Meta's infrastructure expansion includes a massive data center project in rural Louisiana that U.S. President Donald Trump said would cost $50 billion—a facility large enough to cover a significant portion of Manhattan. The company has also signed contracts with Alphabet, CoreWeave, and Nebius for additional computing power, signaling urgent capacity expansion needs due to internal constraints.
As part of this strategic realignment, Meta is laying off approximately 10% of staff at its Reality Labs group, which employs about 15,000 people. This move redirects resources from some metaverse products to wearables, despite the unit having accumulated more than $70 billion in losses since 2021—losses stemming from the ambitious metaverse bet that originally prompted the company's name change from Facebook.
Advertising Platform Continues Driving Growth
Analysts note that Meta's advertising platform remains the company's growth engine, with its Advantage+ automated advertising suite gaining strong adoption due to its ability to streamline campaign setup and enhance return on ad spend. The platform allows advertisers to automate and personalize their campaigns, helping Meta support its massive AI investments.
In the past year, Meta has expanded its advertising reach by launching ads on WhatsApp and Threads, creating direct competition with platforms like Elon Musk's X. Meanwhile, Instagram's Reels continues to compete with TikTok and YouTube Shorts in the lucrative short-video market.
The company has also announced the temporary suspension of its AI-powered conversational character features for underage users in Créteil, France, effective January 26, 2026, demonstrating ongoing adjustments to its AI deployment strategy.
