Meta may issue new non-voting stock to fund its AI expansion

Meta is exploring the issuance of non-voting stock to finance its broad AI buildout. This move was confirmed during the company’s earnings call, where the chief financial officer, Susan Li, said the company plans to create a new class of non-voting capital stock. This stock will be distributed to all existing shareholders through a stock dividend, allowing Meta to maintain its founder-led structure while expanding its funding tools. The company expects this new class of shares to provide flexibility for investing in AI, which is driving unprecedented momentum across its business.

Meta’s third-quarter earnings showed strong performance, with $64 billion in revenue, a 26% increase from the previous year. However, the company’s costs and expenses rose by 68% year-over-year. Despite ongoing losses, the Reality Labs division, responsible for AR glasses, VR headsets, and VR software, is expected to see its losses shrink from $18 billion to $19 billion in 2025.

Meta has been actively developing AI over the past year, releasing several models, including Muse Spark, Muse Glimmer, Muse Wonder, and Muse Spark Open. The company also launched a coding agent for software developers called Muse Code. During its Meta Connect event, the company introduced a new line of avatars for its AI assistant, Meta Muse, to make its services more relatable.

The AI products are performing well, with over 10 million people in the U.S. and Canada setting up Muse personal agents in just a month and a half. CEO Mark Zuckerberg said that Muse has achieved clear product-market fit and is now entering a more operational phase focused on scaling the product to eventually serve billions of people.

However, ongoing regulatory and legal issues remain a concern. Li noted that the company is monitoring active legal and regulatory matters that could significantly impact its business and financial results. Youth-related issues are under scrutiny in several markets, and multiple youth-related trials are scheduled in the coming months in the United States.