Meta Platforms intends to invest up to $65 billion this year to enhance its AI infrastructure, CEO Mark Zuckerberg announced on Friday. The aim is to strengthen its competitive position against tech rivals like OpenAI and Google in the global technology race.
As part of this initiative, Meta plans to increase its hiring of AI professionals and construct a colossal 2-gigawatt data center, which could cover a substantial portion of Manhattan.
The company, a major purchaser of Nvidia's AI chips, targets ending the year with over 1.3 million graphics processors and bringing 1 GW of computing capability online by 2025.
Zuckerberg stated in a Facebook post, "This will be a defining year for AI. This is a massive effort, and over the coming years, it will drive our core products and business."
Leading tech companies have been investing heavily in AI infrastructure following the triumph of OpenAI's ChatGPT.
Meta's announcement follows closely after an announcement by U.S. President Donald Trump that major companies, including OpenAI, SoftBank, and Oracle, will collaborate on a venture named Stargate and invest $500 billion in AI infrastructure nationwide.
In a similar vein, Microsoft declared plans to invest around $ in data centers by fiscal 2025, while Amazon.com projected a spending increase to over $75 billion in 2025.
According to D.A. Davidson analyst Gil Luria, "Zuckerberg is signaling his intention not to lag behind in the AI race. The timing was likely influenced by Stargate, creating a sense of urgency in sending a message."
Shares of Meta saw a 1% increase in trading.
Meta has established itself as a prominent player in the AI arena, with innovations like its AI chatbot, Ray-Ban smart glasses, and open-source strategy, distinguishing it by enabling consumers and most businesses to utilize its Llama AI models at no cost.
Zuckerberg anticipates that Meta's AI assistant, available across its platforms, will cater to over 1 billion users by 2025, up from the approximately 600 million monthly active users in the previous year.
The projected capital spending of $60 billion to $65 billion for 2025 represents a substantial leap from the estimated $38 billion to $40 billion expenditure for the previous year. This figure surpasses analysts' forecast of $50.25 billion for 2025, based on LSEG data.
Meta is scheduled to release its fourth-quarter results on Jan. 29.