Meta Plans New Stock to Fund AI Growth

More than 10 million people in the United States and Canada have configured personal AI agents for Meta in just a month and a half, a figure that underscores the rapid adoption of the company's latest technology. This surge in user engagement has provided a clear signal of product-market fit, prompting the tech giant to accelerate its investment in artificial intelligence infrastructure.

To finance this expansion, Meta confirmed on Wednesday during its third-quarter earnings call that it plans to create a new class of non-voting capital stock. This instrument will be distributed to all existing shareholders through a stock dividend. The new shares are designed to be publicly traded and will serve multiple corporate functions, including capital raising, employee compensation, and acquisitions. By utilizing non-voting shares, the company aims to raise funds without diluting the voting power of its existing Class A and Class B shareholders, thereby preserving its founder-led governance structure.

Susan Li, Meta's chief financial officer, explained that this move expands the company's funding tools. She stated that the new equity class provides the flexibility needed to invest in the unprecedented momentum currently driving every part of the business, largely due to AI. The company reported strong financial performance for the quarter, with revenue reaching $64 billion, a 26% increase from the same period last year. However, costs and expenses also climbed significantly, rising by 68% year-over-year to support these strategic initiatives.

The push into AI has been a central focus for Meta over the past year. The company released several models, including Muse Spark and Muse Glimmer earlier this year. In recent weeks, it introduced Muse Wonder and Muse Spark Open, an open-weight model that allows outsiders to access and build upon its underlying parameters. Meta also launched Muse Code, a coding agent for software developers. At its Meta Connect event, the company unveiled a new line of avatars for its AI assistant, Meta Muse, aiming to make the service more relatable and engaging for users.

CEO Mark Zuckerberg highlighted the strong growth of these products during the earnings call. He noted that the company has maintained the number one spot in the App Store almost every day. Zuckerberg described the current period as a new operational phase focused on scaling the service. He expressed confidence that the product will eventually serve billions of people as it continues to grow.

Despite the positive momentum, Meta faces ongoing challenges. The Reality Labs division, which handles AR glasses and VR headsets, continues to operate at a loss, though the deficit is expected to shrink. The company projects that losses in this division will fall between $18 billion and $19 billion, down from 2025 levels. Additionally, Li noted that the company is monitoring active legal and regulatory matters. These include scrutiny regarding youth-related issues in several markets and several trials scheduled in the coming months within the United States.

The creation of this new stock class represents a significant shift in how Meta manages its capital. By separating voting rights from economic interests, the company seeks to maintain control while accessing the public markets for the substantial funds required to sustain its AI ambitions. This strategy allows Meta to continue investing heavily in its technology stack without altering the balance of power among its current shareholders.