Meta Platforms has announced a dramatic increase in capital expenditures as the company shifts its strategic focus toward artificial intelligence development. The social media giant revealed plans to spend up to $135 billion on building new data centers in 2026, representing an 87% increase from the previous year’s capital spending. This massive investment underscores Meta’s commitment to AI infrastructure as the company repositions itself in the rapidly evolving technology landscape.
CEO Mark Zuckerberg is directing these substantial resources toward the company’s AI Superintelligence team, which Meta has assembled through significant cash and stock investments. According to reports, this includes a $14 billion investment in Scale AI to acquire a 49% stake and bring on founder Alexandr Wang. The company has effectively moved its metaverse initiatives to a lower priority as artificial intelligence opportunities take center stage.
Meta Capital Expenditures Drive Operating Margin Pressure
The substantial increase in Meta capital expenditures has begun affecting the company’s profitability metrics. Operating margin declined from 48% in the fourth quarter of 2024 to 41% in the same period of 2025, according to the company’s financial disclosures. Additionally, depreciation expense increased 20% in 2025 and is expected to climb further following last year’s elevated spending levels.
Research and development expenses have also surged alongside infrastructure investments. The company reported a 40% year-over-year increase in R&D spending during the fourth quarter, primarily reflecting higher personnel costs. However, management has reassured investors that despite margin pressure, Meta still expects to grow overall operating income in 2025.
AI Integration Fuels Revenue Growth
Meta has demonstrated notable success in leveraging artificial intelligence advancements to drive business results. The company achieved 24% revenue growth in the fourth quarter, supported by strong user engagement and steady advertising price increases. These results suggest that Meta’s AI investments are already delivering measurable returns.
Meanwhile, the company is beginning to integrate large language models with its machine learning recommendation systems. Zuckerberg indicated that this technology could enable content feeds that align with users’ goals rather than merely their implied interests. Such capabilities could significantly enhance app engagement and user satisfaction.
Generative AI Opens New Advertising Opportunities
The implementation of generative AI technology presents substantial opportunities for expanding Meta’s advertising business. The company anticipates that AI tools will make it easier for businesses to develop and test ad campaigns, potentially increasing the total number of advertisers on its platforms. In contrast to traditional advertising approaches, these AI-powered solutions could lower barriers to entry for smaller businesses.
Furthermore, Meta is developing AI-driven shopping agents for WhatsApp and Messenger, along with more personalized content targeting capabilities. These innovations could generate significant new advertising revenue streams as the technology matures. Industry observers note that Meta’s extensive user base and data resources position it to benefit from generative AI advances more than most competitors.
Financial Implications of AI Strategy
The company’s aggressive spending strategy represents a calculated bet on artificial intelligence as a transformative technology. While near-term profitability faces pressure from elevated costs, Meta’s management believes the long-term revenue opportunities justify current investments. The combination of infrastructure spending and personnel costs related to the Superintelligence Lab will continue affecting financial performance throughout 2026.
Investors will be closely monitoring Meta’s ability to balance growth investments with profitability as the year progresses. The company has not provided specific guidance on when it expects operating margins to stabilize or begin recovering from current levels.
