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Meta (NASDAQ:META) just dropped a bombshell: It's going all-in on AI with up to $65 billion in capital expenditures for 2025a jaw-dropping 70% jump from last year. Zuckerberg's play? Build a data center in Louisiana so massive it would cover a significant part of Manhattan. This isn't just about keeping up with the AI raceit's about leading it. The move comes hot on the heels of Project Stargate, the $500 billion AI infrastructure initiative backed by OpenAI, SoftBank (SFTBY), and Oracle (NYSE:ORCL). With Big Tech in an arms race over AI, Meta isn't sitting on the sidelinesit's doubling down.
Wall Street expected Meta to spend around $51 billion this year, but Zuckerberg just blew past that estimate. Meta plans to end 2025 with over 1.3 million GPUs and ramp up hiring to supercharge its AI teams. Investors took noticeshares ticked up nearly 2% as analysts backed the aggressive spending. The question now: Is Meta future-proofing its business or overextending itself? Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOG), and Amazon (NASDAQ:AMZN) are all throwing billions at AI infrastructure, but even some insiders, including Elon Musk, have warned about the risks of overspending.
AI is the new gold rush, and data centers are the pickaxes. Companies that don't invest now risk falling behind, but there's a fine line between strategic expansion and reckless spending. If Meta's bet pays off, it could lock in a dominant position in AI for the next decade. If not, it's a very expensive gamble. With its Q4 earnings just days away, investors are watching closely. Will Meta justify the spend, or will doubts start creeping in?
This article first appeared on GuruFocus.