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Meta is planning to raise $25bn from a bond sale to help it pay for soaring artificial intelligence costs, even as the Big Tech group’s shares suffered one of their worst days ever over concerns that its spending is too high.
The social media group had hired Citigroup and Morgan Stanley to raise up to $25bn in debt, ranging from five to 40 years in maturity, in what would be one of the biggest bond sales of the year, according to two people close to the matter.
It comes a day after chief executive Mark Zuckerberg warned that the US tech group would spend even more aggressively as part of an arms race to build the data centres and infrastructure powering the AI boom.
Meta’s shares were down 10 per cent on Thursday as investors fretted over the huge outlay, wiping out about almost $200bn from its valuation — its second biggest one-day loss.
The bond sale underscores how technology giants are increasingly turning to the debt markets as they spend record sums to build AI infrastructure.
Meta raised $27bn of private debt from credit providers, including Pimco and Apollo, in recent months to fund construction of its huge “Hyperion” data centre in Louisiana. Oracle sold $18bn of bonds in September.
Large tech companies are projected to invest $400bn on AI infrastructure this year, including buying computer chips and building data centres. On Wednesday, Meta, Microsoft and Google’s parent Alphabet all disclosed larger than expected spending plans in the current quarter.
The social media company said capex could hit $72bn by the end of the year and that spending growth would be “notably larger” in 2026, implying a number far in excess of an earlier forecast for $105bn.
Zuckerberg defended huge spending on infrastructure for Meta’s own use. He told analysts on Wednesday that it was “the right strategy to aggressively frontload building capacity” as part of the tech group’s bid to be the first to build artificial superintelligence.
“They’re tripling down on what they believe in,” said Youssef Squali, head of internet and media equity research at Truist Securities. “You don’t have as much as $110bn capex expectations plus all those off balance sheet financings if you don’t believe that in the addressable market over time you’re going to be number one, two or three.”
He added that he was bullish on Meta despite the heavy spending given recent increases in user growth and engagement, alongside continued momentum in the advertising business.
At a recent dinner with US President Donald Trump, Zuckerberg said Meta planned to spend $600bn on US data centres and AI infrastructure through to the end of 2028.
Meta, Citigroup and Morgan Stanley declined to comment. The bond sale was first reported by Bloomberg.
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