Meta profits fall 14% as AI spending increases costs
Meta (the company behind Facebook and Instagram) saw its profits drop 14% this quarter, even though revenue actually jumped by 28%.
Turns out, all that extra cash went straight into expensive AI projects, pushing costs up by 55% to $42 billion.
After the news broke, Meta's stock slid more than 9% in after-hours trading.
Meta raises capex to $130B
Meta bumped the lower end of its yearly capital expenditure forecast to $130 billion, mostly for building out AI-powered data centers.
CEO Mark Zuckerberg is betting big on AI to boost digital ads and even sell computing power down the line.
The company rolled out fresh AI tools like Muse Spark and has a video generator planned for future release, but had to pull an Instagram image feature over privacy concerns.
Legal troubles cost Meta $2.4 billion this quarter, but its apps still grew, hitting 3.6 billion users (up 3%).