Meta Platforms tweak accounting formula on AI servers to boost profit

Meta Platforms Inc. made a small change last month that’s likely to increase the company’s profit by billions of dollars this year.

It wasn’t the release of a new product or cost cuts. It was a tweak to an accounting formula used to measure the depreciation of its expensive artificial intelligence infrastructure.

The change, disclosed in the social-media giant’s earnings materials on Jan. 29, extends the so-called useful life period of certain servers and networking assets to five and a half years, from the four to five years it previously used. While that may sound trivial, its impact on earnings will be sizable given the heavy spending on these relatively short-lived assets.