Meta shares plunge 7% as AI spending plans spook Wall Street

Meta Platforms suffered a $124bn-plus market wipeout on Thursday after telling investors it must raise “hundreds of billions of dollars” to bankroll its artificial intelligence ambitions — a disclosure that reignited fears over the sustainability of big tech’s debt-fuelled AI splurge, now totalling more than $1trn (The Times).

Meta shares fell 7 per cent, leaving the business worth almost $1.65trn. The company said it had committed about $825bn to future spending on data-centre and energy leases, computing power, hardware and cloud capacity — up from the near-$700bn it reported in July — with the fundraising to begin as early as this autumn (The Times; Reuters).

The rout spread across US equities. The Nasdaq slid 694 points, or 2.6 per cent, to 26,008.86 — its biggest one-day fall since June — while the S&P 500 fell 93.74 points (1.21 per cent) to 7,663.43 and the Dow edged up 11.89 points (0.02 per cent) to 52,867.98 (WSJ). SpaceX retreated 9.1 per cent, Nvidia slid 4.4 per cent, and the PHLX Semiconductor index tumbled 6.7 per cent (The Times; WSJ).

Meta’s profit missed Wall Street expectations despite soaring revenue, and Nvidia chief executive Jensen Huang said the industry lacked the capital needed to fuel the growth of so-called neoclouds (WSJ). Investors fled to bonds: the two-year Treasury yield fell 0.188 percentage points to 4.635 per cent, its biggest one-day decline in more than a year, and the 10-year fell below 5 per cent for the first time in a month (WSJ).

Separately, Meta agreed to award Mark Zuckerberg non-voting shares he can sell to pay any potential California billionaire wealth tax, after he told the board he was considering leaving the state; he has pledged to remain in California for eight years (The Times; Reuters).