Zuck heads for the clouds

For years, investors have raised eyebrows at big tech’s mind-boggling infrastructure spending—and Meta Platforms heard the message loud and clear. Today, Bloomberg reported that the company is planning to build a new cloud venture that could bring in billions to offset its massive capex spending.

Shares of Meta popped 8.81% on the announcement.

The deets: One business model Meta is reportedly considering is selling access to developers, allowing them to use the AI models that already exist on the company’s infrastructure, like Meta’s Muse Spark. Another option is for the company to just sell its excess computing capacity directly to other businesses, a la CoreWeave.

Speaking of which, shares of CoreWeave sank 13.92% today, while Nebius Group, another neocloud provider, fell 17.01% following the news.

The AI race is expensive

For years, Mag 7 companies have been rushing to build data centers, the key infrastructure powering the artificial intelligence boom. AI models like ChatGPT, Claude, and Gemini need huge amounts of power, creating a massive scramble for computing.

But winning the AI race takes some serious cash, and Mark Zuckerberg has been forced to pony up: In April, Meta told investors it was planning to spend $145 billion on capex this year, up from roughly $72 billion in 2025. Overall, Meta, Google, Amazon, and Alphabet are expected to spend a staggering $725 billion on AI infrastructure in 2026 alone.

Those numbers spooked investors, and shares of Meta sank over 14% year to date through yesterday’s close. But renting access to cloud computing power could help Meta recoup some of those massive costs, while simultaneously raising the profile of its nascent LLM Muse Spark.

Just don’t forget: Fellow Magnificent Seven members Amazon, Microsoft, and Google are already in the cloud, and have spent many years and billions of dollars to establish their positions there. It remains to be seen how much market share Meta can take from them, but if you thought the AI race was already red-hot, you ain’t seen nothing yet.—LB