Meta reported a 91 percent drop in second-quarter free cash flow to $784 million, down from $8.55 billion a year earlier, as CEO Mark Zuckerberg’s artificial intelligence (AI) spending spree continues to strain the company’s finances.
The company revealed nearly $700 billion in future data center leasing commitments, including $279 billion in long-term leases. Shares fell 10 percent in after-hours trading as investors questioned the payoff of Meta’s AI bet.
The AI spending spree
Meta’s AI buildout is accelerating. The company plans to double its computing power to 7 gigawatts this year and to 14 gigawatts in 2027. It currently has 32 data centers globally in operation or under construction.
The company raised its 2026 capex outlook to $130-145 billion from $125-145 billion, and at the start of the year had forecast $115-135 billion.
So far, Meta expects to spend as much as $145 billion on AI infrastructure this year, about double 2025’s investment. The spending is part of Big Tech’s more than $700 billion projected AI outlay in 2026.
Investor skepticism and revenue growth
To this point, investors are growing increasingly skeptical. “Meta’s AI spend was easier to celebrate when margins were expanding. It’s harder to celebrate now that the costs are showing up in the numbers,” said Mike Proulx of Forrester.
The company reported earnings per share (EPS) of $6.18, missing the $7.22 analyst estimate. Zuckerberg argued Meta is uniquely positioned to commercialize AI at scale, betting that personal AI agents will become a huge consumer business.
Revenue jumped 28 percent to $60.8 billion, the fastest growth since 2021, and daily active people reached 3.6 billion. The company is also facing $1.4 trillion in potential penalties over youth addiction lawsuits.
Meta’s AI product push: From business agents to personal superintelligence
Despite the eye-watering spending, Meta is rapidly shipping AI products across consumer and enterprise fronts. Meta Business Agent, now used by over 1 million businesses weekly on WhatsApp and Messenger, can answer questions, make recommendations, book appointments, and close sales.
In the meantime, Zuckerberg is betting big on personal AI agents that work 24/7 on users’ behalf, positioning them as “the foundation for the next wave of products.” The company’s new Muse model family is powering this push, with image and video generation integrated into Meta AI, while large language models (LLMs) now process every Reel and Feed post for topic and tone analysis.
In addition, Meta has been dabbling in medical AI systems such as Brain2Qwerty, which decode thoughts into text without surgical intervention. In the field of ‘finance’, they are also developing a prediction markets application, ‘Arena’.
Nevertheless, despite the company’s massive, controversial latest layoffs, they have also decided to launch a $115 million America’s Workforce Academy (AWA). The academy aims to train tradespeople for AI data center-related jobs powering “personal superintelligence” AI assistants. Something good in the middle of the current tech layoff crisis.
