Meta to fund AI expansion with new non-voting shares

Meta Platforms has long prioritized technological innovation, and it is now taking a structural step to secure the resources needed for its next major initiative. On Wednesday, the company revealed plans to introduce a new category of equity designed specifically to finance its aggressive rollout of artificial intelligence tools.

The primary objective of this financial maneuver is to generate capital without diluting the influence of current owners. Chief Financial Officer Susan Li confirmed during the third-quarter earnings call that the company intends to create non-voting capital stock. This new class of shares will be distributed to all existing shareholders through a standard stock dividend. By issuing these specific units, Meta aims to raise funds for acquisitions, employee compensation, and general corporate needs while ensuring that the voting power of its existing Class A and B shareholders remains intact.

Li explained that this move preserves the company's founder-led governance structure. The new shares are intended to expand the firm's funding toolkit, providing the flexibility required to invest in the rapid growth driven by AI across all business units. This strategy allows Meta to pursue large-scale projects without the complexity often associated with issuing additional voting equity, which could shift the balance of control among the board and major investors.

The announcement coincided with a strong financial performance for the quarter. The company reported total revenue of $64 billion, marking a 26 percent increase compared to the same period last year. However, this growth came with a significant rise in operational costs, which surged by 68 percent year-over-year. The Reality Labs division, responsible for virtual and augmented reality hardware, continues to operate at a loss, though the company expects these deficits to narrow from previous levels to a range of $18 billion to $19 billion.

Meta has accelerated its AI efforts over the past year, releasing several models including Muse Spark and Muse Glimmer. Recently, the company introduced Muse Wonder and Muse Spark Open, the latter being an open-weight model that allows external developers to build upon its parameters. Meta also launched Muse Code, a specialized agent for software developers. At its recent Connect event, the firm unveiled a new line of avatars for its AI assistant, Muse, aiming to make the technology more approachable and engaging for users.

The new products are gaining traction quickly. CEO Mark Zuckerberg noted that more than 10 million people in the United States and Canada have set up personal Muse agents in just a month and a half. He described the growth as strong, noting that the app has ranked first in the App Store almost daily. Zuckerberg stated that the company is entering a more operational phase focused on scaling the product to eventually serve billions of users. Despite this momentum, Li acknowledged that regulatory and legal challenges remain, particularly regarding youth-related issues in several markets, with several trials scheduled in the coming months in the United States.