{"slug": "meta-profit-falls-14-as-ai-spending-hits-130-billion", "title": "Meta Profit Falls 14% as AI Spending Hits $130 Billion", "summary": "Meta reported a 14% drop in second-quarter profit to $18.3 billion despite a 28% revenue surge to $60.8 billion, driven by a 55% jump in costs to $42 billion from aggressive AI infrastructure spending. The company raised its annual capital expenditure forecast to $130 billion, sending shares down over 9% in after-hours trading as investors worry about monetization.", "body_md": "**July 30, 2026**, (Inside AI) — **Meta** reported a **14%** drop in second-quarter profit to **$18.3 billion**, even as revenue surged **28%** to **$60.8 billion**. The decline was driven by a **55%** jump in costs to **$42 billion**, fueled by aggressive spending on artificial intelligence infrastructure.\n\nThe company raised the lower end of its annual capital expenditure forecast to **$130 billion**, up from **$125 billion** in April, with most funds directed toward AI data centers. CEO **Mark Zuckerberg** defended the outlays, stating AI is now accelerating every major part of the core business. He also flagged selling raw computing power as a potential new revenue stream.\n\nInvestors recoiled, sending shares down more than **9%** in after-hours trading. The reaction echoes broader market anxiety over Big Tech's **$1.5 trillion** collective data center bill expected this year and next, following **Google**'s own capex hike last week.\n\nMeta's spending spree is unique among hyperscalers. Unlike **Amazon**, **Microsoft**, and **Google**, it lacks a cloud computing business to monetize AI infrastructure directly. In June, **Anthropic** offered to buy computing power from Meta in a deal potentially worth **$10 billion**; talks are ongoing. Zuckerberg confirmed the company is exploring selling compute as a service.\n\n\"We are now at a point where our investments in AI are accelerating every major part of our core business,\" Zuckerberg said. He added that \"potentially selling compute directly\" could be a new business opportunity.\n\nThe pivot to AI has been bumpy. This month, Meta yanked a feature letting users generate AI images of each other on Instagram days after launch due to privacy backlash. Yet it also released **Muse Spark**, its most advanced AI model under chief AI officer **Alexandr Wang**, alongside an image generator, **Muse Image**, with a video generator due in coming months. A more powerful model, code-named **Watermelon**, is slated for fall.\n\nMuse Spark still lags rivals on coding, reasoning, and writing benchmarks, according to internal assessments. Meta's open-source approach has drawn fire from competitors, but Zuckerberg pushed back in a **New York Times** interview Tuesday, saying tightly controlling AI would be \"abandoning our values\" and stifle innovation.\n\nMeta's legal woes persist. It spent **$2.4 billion** on legal fees in the quarter, partly tied to addiction litigation. It lost the first of nine bellwether trials in March but gained a reprieve when a **15**-year-old Florida plaintiff dropped his suit this month.\n\nReality Labs, home to AI smart glasses, generated **$431 million** in revenue, up **16%**, but lost **$4.6 billion**, flat year-over-year. The family of apps grew to **3.6 billion** users, a **3%** increase.\n\n\"People think AI spending is supposed to slow down, but who's going to be the first company to blink?\" said **David Wagner**, head of equity at **Aptus Capital Advisors**.\n\nMeta's capex trajectory underscores a high-stakes bet: build infrastructure first, find monetization later. The Anthropic talks signal a possible path, but with no cloud business, Meta must prove AI can lift ad revenue enough to justify the tab, or that selling compute becomes a viable third-party business. For now, Wall Street remains unconvinced.", "url": "https://wpnews.pro/news/meta-profit-falls-14-as-ai-spending-hits-130-billion", "canonical_source": "https://insideai.news/news/ai-in-business/meta-profit-falls-14-as-ai-spending-hits-130-billion/6517/", "published_at": "2026-07-30 05:17:43+00:00", "updated_at": "2026-07-30 05:40:36.217654+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-infrastructure", "ai-products", "ai-policy"], "entities": ["Meta", "Mark Zuckerberg", "Anthropic", "Alexandr Wang", "Muse Spark", "Muse Image", "Google", "Aptus Capital Advisors"], "alternates": {"html": "https://wpnews.pro/news/meta-profit-falls-14-as-ai-spending-hits-130-billion", "markdown": "https://wpnews.pro/news/meta-profit-falls-14-as-ai-spending-hits-130-billion.md", "text": "https://wpnews.pro/news/meta-profit-falls-14-as-ai-spending-hits-130-billion.txt", "jsonld": "https://wpnews.pro/news/meta-profit-falls-14-as-ai-spending-hits-130-billion.jsonld"}}