Meta creates non-voting shares to fund massive AI spending

Meta Platforms has announced a strategic financial move designed to support its expanding artificial intelligence infrastructure. The company intends to issue a new category of stock that does not carry voting rights, a decision confirmed during its third-quarter earnings call on Wednesday. This new instrument is specifically engineered to help finance the company’s aggressive investment in AI technology while maintaining the current governance structure that favors its founding members.

The financial details of the announcement reveal a company balancing rapid growth with rising costs. Meta reported total revenue of $64 billion for the quarter, representing a 26 percent increase compared to the same period last year. However, this growth came with a significant jump in expenses, which rose by 68 percent year-over-year. The company’s Reality Labs division, which oversees virtual and augmented reality hardware and software, continues to operate at a loss, though management expects these deficits to narrow to between $18 billion and $19 billion, down from 2025 levels.

Susan Li, the company’s chief financial officer, explained the mechanics of the new shares during the earnings call. She stated that the firm plans to distribute this new class of non-voting capital stock as a dividend to all existing shareholders. Li described the purpose of these shares as a tool for capital raising, employee compensation, and acquisitions. By creating this separate class, Meta aims to preserve the voting power held by current Class A and Class B shareholders, thereby keeping the company’s founder-led structure intact while expanding its available funding tools.

The push for new capital is driven by a surge in AI product adoption. Over the past year, Meta has launched several models, including Muse Spark, Muse Glimmer, and Muse Wonder. More recently, it released Muse Spark Open, an open-weight model that allows external developers to access its underlying parameters, along with Muse Code, an agent designed for software developers. At its recent Meta Connect event, the company also introduced a line of character avatars for its AI assistant, Meta Muse, aiming to make the technology more relatable to users.

CEO Mark Zuckerberg highlighted the traction these new products have gained. He noted that in just six weeks, more than 10 million people in the United States and Canada have configured personal agents using Muse. Zuckerberg indicated that the platform has been the top application in the App Store for nearly every day of that period. He characterized the current moment as a transition into a more operational phase focused on scaling the service, with long-term goals of eventually serving billions of users globally.

Despite the strong product performance, the company acknowledges external challenges. Li noted that Meta is monitoring various legal and regulatory matters that could affect its financial results. Specifically, she pointed to ongoing scrutiny regarding youth-related issues in several markets. The company has several trials related to these concerns scheduled in the coming months within the United States, which remain a focus for its legal teams.

This financial restructuring allows Meta to continue investing in AI without altering the balance of voting power among its existing investors. The new shares will be used for general corporate purposes, including hiring and potential acquisitions, ensuring the company has the liquidity needed to match the momentum it is seeing across its business units. This approach provides flexibility in how the company deploys capital in a competitive technology landscape.