Meta issues non-voting shares to fund AI

Meta Platforms is navigating a high-stakes financial maneuver to sustain its massive artificial intelligence ambitions. On Wednesday, the company confirmed plans to issue a new class of non-voting stock, a move designed to generate capital while protecting the voting power of its current shareholders. This strategic shift aims to fund the continued buildout of its AI infrastructure without altering the existing balance of corporate governance.

During the third-quarter earnings call, Chief Financial Officer Susan Li detailed the structure of the new equity. The shares will be distributed as a stock dividend to all existing holders. Li explained that the creation of this new class serves several purposes, including capital raising, employee compensation, and acquisitions. By keeping these shares non-voting, the company intends to preserve its founder-led structure while expanding its financial toolkit to capitalize on momentum across its business units.

The financial results for the quarter were robust, with total revenue reaching $64 billion, marking a 26 percent increase from the same period last year. However, this growth came with a significant cost. Expenses surged by 68 percent year-over-year, reflecting the heavy investment in new technologies. The Reality Labs division, which handles augmented and virtual reality hardware, continues to operate at a loss, though the company projects these deficits will shrink to between $18 billion and $19 billion, down from 2025 levels.

Meta has aggressively expanded its AI portfolio over the past year. The company released several models, including Muse Spark, Muse Glimmer, and Muse Wonder. It also introduced Muse Spark Open, an open-weight model that allows external developers to build upon its parameters, and Muse Code, a specialized agent for software developers. At its annual Connect event, Meta unveiled a line of avatars for its AI assistant, Meta Muse, aiming to make the technology feel more relatable and shareable.

Leadership indicated that these new products are resonating with users. CEO Mark Zuckerberg stated that more than 10 million people in the U.S. and Canada have set up Muse personal agents in just six weeks. He noted that the product has maintained the number one spot in the App Store for nearly every day of that period. Zuckerberg described the company as entering an operational phase focused on scaling, with long-term goals to serve billions of users.

Despite the optimistic outlook on AI adoption, executives acknowledged ongoing risks. Li noted that the company continues to monitor active legal and regulatory matters that could affect its financial results. Specifically, she highlighted increasing scrutiny regarding youth-related issues in various markets, with several trials scheduled in the United States in the coming months.

The introduction of non-voting shares provides Meta with greater flexibility in how it allocates resources. This move allows the company to pursue acquisitions and employee incentives without impacting the voting dynamics that have characterized its leadership structure. As the AI race intensifies, Meta appears committed to securing the capital necessary to remain at the forefront of the technology, even as it manages the costs of rapid expansion.