Meta Platforms (META) CEO Mark Zuckerberg once said that the company could not afford to fall behind in AI. As a result, the firm outlined plans to spend $600 billion in capital.
This is a red flag.
Meta has a history of overspending on failed projects. The metaverse is the best example. The Meta Quest VR headset endeavor is a more recent example of mounting losses. The firm’s Reality Labs division lost $4.4 billion in the third quarter of 2025. The cumulative loss (since 2020) is over $60 billion.
Meta said that it will invest in industry-leading AI data centers run domestically (in the U.S.). It committed over $600 billion in spending by 2028. Competitor Google (GOOG) will spend between $91 billion and $93 billion in 2025.
Meta will also work with local utilities to obtain the necessary water and electricity that those servers require. Locations include El Paso, Texas, Kansas City, and Montgomery.
Growing Loss Warning
Stock markets are not confident that Meta will turn the $600 billion investment into more than $600 billion in profits. Still, the firm enjoyed plenty of high-margin profits from advertising revenue. But the government might crack down on the firm’s $15 billion in revenue stemming from scam and fraud advertisers. As a result, Meta may end up with insufficient funds to pay for its AI hardware.
