Meta to Issue New Non-Voting Shares to Fund $64 Billion AI Push

Shareholders of Meta will soon hold a new type of equity that does not carry voting rights, a structural change designed to finance the company's aggressive expansion into artificial intelligence. Announced during the company's third-quarter earnings report on Wednesday, this new class of stock will be distributed to all current investors via a stock dividend. The move allows Meta to raise significant capital for its AI initiatives without diluting the voting power of its existing Class A and B shareholders, thereby preserving the company's founder-led governance structure.

Susan Li, Meta’s chief financial officer, detailed the mechanism during the earnings call. She stated that the company intends to create this new class of non-voting capital stock specifically to serve as a public trading instrument. Li explained that these shares will be used for capital raising, employee compensation, acquisitions, and other general corporate purposes. By separating voting power from capital ownership, Meta aims to expand its funding tools and maintain the flexibility needed to invest in what it describes as the unprecedented momentum driving its business through AI.

The financial backdrop for this strategic shift was a strong performance in the just-concluded quarter. Meta reported total revenue of $64 billion, marking a 26 percent increase compared to the same period last year. These results exceeded Wall Street expectations. However, the company also noted a significant rise in operational costs, with expenses climbing 68 percent year-over-year. This surge in spending reflects the heavy investment required to build out its new AI infrastructure and products.

While the core business remains profitable, Meta’s Reality Labs division, which handles augmented reality glasses, virtual reality headsets, and related software, continues to operate at a loss. Nevertheless, the company indicated that these losses are narrowing. In its earnings report, Meta projected that the division’s annual losses will shrink from their 2025 levels to a range between $18 billion and $19 billion. This improvement suggests a gradual path toward profitability for the hardware and immersive technology segments.

Over the past year, Meta has accelerated its release of AI models, introducing several key products to the market. Earlier this year, the company launched Muse Spark and Muse Glimmer. In recent weeks, it added Muse Wonder and Muse Spark Open. The latter is an open-weight model, meaning its underlying parameters are publicly available, allowing external developers to use and build upon the technology. Additionally, Meta released Muse Code, a specialized coding agent designed to assist software developers in their daily workflows.

At its Meta Connect event earlier this year, the company also debuted a new line of avatars for its AI assistant, Meta Muse. These characters are designed to be cute and cuddly, aiming to make the AI services feel more relatable and accessible to users. The strategy appears to be resonating with the public. During the earnings call, CEO Mark Zuckerberg noted that the products are performing well, citing strong engagement metrics and consistent app store rankings.

Zuckerberg highlighted the rapid adoption of the new AI features. He stated that in just one and a half months, more than 10 million people in the United States and Canada had set up personal agents using Muse. He added that growth remains strong and that the product has ranked number one in the App Store almost every day. The CEO described the current moment as a transition into a more operational phase, focused on scaling the product to serve billions of people in the future.

Despite the positive momentum in AI adoption, Meta acknowledged that regulatory and legal challenges remain on the horizon. Li noted that the company is actively monitoring ongoing legal and regulatory matters that could significantly impact its business and financial results. Specifically, she pointed to continued scrutiny regarding youth-related issues in several markets. Meta has several youth-related trials scheduled in the coming months within the United States, which could influence its operational and financial outlook.

The creation of this new stock class represents a significant evolution in Meta’s corporate structure. By leveraging a publicly traded non-voting instrument, the company positions itself to raise large sums of money for its AI ambitions while keeping decision-making authority with its existing core shareholder base. This approach mirrors strategies used by other tech giants to balance growth investment with governance control, allowing Meta to fund its next phase of development without altering the power dynamics that have defined its leadership for years.

For investors and observers, the key takeaway is the separation of economic interest from voting control. While the new shares will provide liquidity and a marketable asset for compensation and fundraising, they will not influence corporate governance. This distinction is crucial for maintaining the status quo in Meta’s boardroom while opening the door to massive capital injection for its AI projects, which are central to its future growth strategy.