Meta equity raise jumps to $97.5bn to fund AI build-out

Data centres and advanced chips drive massive fundraising target

The revised target was confirmed on Tuesday, alongside an increase in its common stock offering from $22.5 billion to $25 billion. 

The shares are priced at $625 each, while a separate sale of 250 million depositary shares at $50 apiece brings the total value of its current public offerings to around $35 billion.

Meta plans to raise more money through an additional programme worth up to $60 billion in early 2027, once new non-voting Class C shares begin trading. 

The scale of the effort highlights the enormous financial demands of competing with AI developers such as OpenAI and Anthropic.

AI ambitions come with rising costs and questions over funding deals

Meta is not alone in seeking substantial funding for the sector. Alphabet increased its own equity offering to $84.75 billion in June, reflecting the growing cost of building and expanding AI capabilities.

The financing has also attracted interest from companies supplying the hardware behind these investments.

Nvidia, AMD and Broadcom have expressed interest in buying up to $5 billion in Meta Class A shares collectively, while Nvidia has separately confirmed a $3 billion investment.

However, these arrangements have raised concerns about circular financing within the AI industry, where chipmakers help fund companies that may then spend that money purchasing their products.

Analysts at William Blair expect investors to keep scrutinising Meta's financing strategy and the prospect of further capital raises. 

They added: "Overall, we believe the financing reinforces both Meta's confidence in the long-term returns from AI investment and the increasingly capital-intensive nature of pursuing that opportunity."