Meta’s AI splurge lays bare its compute conundrum

Meta can simultaneously fuel its own AI ambitions and rent out its scarce computing capacity to bolster returns, CEO Mark Zuckerberg signaled on Wednesday. The problem is: investors aren’t buying it.

The Instagram owner is splurging billions to build compute – chips, servers, energy and data centers that power AI – leaving it with free cash flow of just $784 million in the second quarter to run and grow its business. That collapse, of 91% from a year ago, drove its stock down 9% premarket on Thursday.