UPDATE 4-Meta eyes record $95 billion equity raise to fund AI expansion
* Offerings include about $35 billion of common andconvertible preferred stock
* Meta plans separate share sale program of up to $60billion after Class C stock begins trading
* Nvidia, AMD and Broadcom express interest in buying up to$5 billion of Class A stock
(Adds shares, analyst commentary in paragraphs 7-9 and 18)
By Jaspreet Singh
Oct 26 (Reuters) - Meta Platforms said onMonday it plans to raise up to $95 billion in its largest-everequity fundraising, as the social media giant spendsaggressively on its AI infrastructure expansion.
The Facebook parent has launched public offerings worthabout $35 billion in common and preferred stock, and said italso plans to launch a separate at-the-market share sale programworth up to $60 billion.
The company will launch the larger share sale program afterits new non-voting Class C shares begin trading, which isexpected in the first quarter of 2027, but said it has not yetfinalized its timing and terms of the sale.
Meta's fundraising plan, among the biggest by an AI company,has also drawn interest of up to $5 billion in total from Nvidia, Advanced Micro Devices and Broadcomfor Class A shares.
Their funding interest adds to concerns about anincreasingly circular flow of capital in the AI industry, aschip suppliers help finance the expansion of one of theirbiggest customers.
Meta has been pouring money into chips and data centers tocompete better with OpenAI and Anthropic.
"We expect investors to continue to question the financingand potential for future capital raises," William Blair analystssaid in a note.
"Overall, we believe the financing reinforces both Meta'sconfidence in the long-term returns from AI investment and theincreasingly capital-intensive nature of pursuing thatopportunity."
The company's shares fell about 1.4% in morning trading.
The latest fundraising further underscores a shift among bigtechnology companies increasingly tapping debt markets andraising equity to bolster their AI infrastructure, havingpreviously relied on cash to fund their investments.
Earlier this year, Alphabet increased the size of its equityofferings to $84.75 billion.
Separately on Monday, SpaceX said an affiliate of ApolloGlobal Management will buy AI chips and server hardwareand lease them to the rockets-to-AI firm, in a deal with totalprincipal payments of about $40 billion.
META'S AI SPENDING IS BURNING CASH
Meta has committed to spend about $825 billion in thefuture, primarily driven by its growing investments in datacenters, AI-related infrastructure and cloud computing power.
But the aggressive expansion has eroded its historicallystrong free cash flow.
The company reported a $2.12 billion cash burn in the thirdquarter, its first negative free cash flow in over a decade,compared with a positive cash flow of $10.63 billion a year ago.
Still, the early popularity of its consumer-focused AI agentMuse and release of a competitive new series of AI models havehelped partly justify Meta's aggressive investments.
"We believe that Meta will ultimately produce a profitableAI business and its returns longer-term should help the companydiversify, although the path may not be linear," William Blairanalysts said.
The company had cash, cash equivalents and marketablesecurities of $82.45 billion and long-term debt of $80.92billion as of September 30, according to its latest quarterlyfiling.
Last week, Meta raised the lower end of its annual capitalexpenditure forecast to a range of $135 billion to $145 billion.
The company has said it would issue Class C common stock inJanuary 2027, effectively resulting in a two-for-one split, tofund acquisitions and retain top talent while maintaining CEOMark Zuckerberg's control.
Metaagreed to grant Zuckerberg Class C shares that he cansell to help pay a potential California billionaire wealth tax,in exchange for a commitment to keep him in California.
(Reporting by Jaspreet Singh in Bengaluru; Editing by LeroyLeo)
