Meta Platforms shares META surged in trading on Wednesday following a report that the company is developing a cloud infrastructure business that would sell artificial intelligence computing power and AI models to external customers.
The proposed business would allow Meta to generate revenue from excess AI computing capacity, potentially creating a new source of income while expanding its presence in the fast-growing cloud infrastructure market.
Shares of Meta rose 10.6% in trading following the report.
Meta explores AI cloud infrastructure business
According to Bloomberg, Meta is developing plans to sell access to AI computing infrastructure and hosted AI models through a new business built around its expanding data center network.
One option under consideration would allow customers to access AI models hosted on Meta’s infrastructure, similar to Amazon Web Services’ Bedrock platform.
Another would involve selling raw computing capacity, placing Meta in direct competition with AI-focused cloud providers such as CoreWeave and Nebius.
The initiative is part of Meta Compute, the company’s internal effort to build and manage AI infrastructure.
The report weighed on companies that already provide AI computing services. CoreWeave fell about 14% in trading, while Nebius dropped 15%.
The move would also expand competition for the major cloud providers, including Amazon Web Services, Microsoft Azure, and Google Cloud.
New revenue opportunity for AI investments
Meta has significantly increased spending on artificial intelligence infrastructure as it pursues its goal of developing AI “superintelligence.”
In April, the company raised its projected capital expenditure for the year by $10 billion to a range of $125 billion to $145 billion, citing “expectations for higher component pricing” and “additional data center costs.”
The company has also committed billions of dollars to data centers and AI chips while entering computing agreements with companies including CoreWeave, Google, and Oracle.
A cloud infrastructure business could provide Meta with a way to monetize those investments beyond its core advertising business.
Unlike its cloud rivals, Meta has historically justified its AI spending primarily through improvements to its own products, while Amazon, Microsoft, and Google have long generated revenue by renting computing infrastructure to outside customers.
The report also comes as investors continue to monitor Meta’s efforts to commercialize artificial intelligence through products such as its Meta AI chatbot.
Zuckerberg has signaled openness to the idea
Meta Chief Executive Officer Mark Zuckerberg previously acknowledged that selling excess computing capacity is a possibility if the company builds more infrastructure than it ultimately requires.
“It’s definitely on the table,” Zuckerberg said during a shareholder call in May. “Almost every week there are different companies that come to us from the outside asking us to both stand up an API service or asking if we have compute that they could buy from us at some premium to what we’ve bought it at.”
“We haven’t done that yet because we think we have a use for the compute,” Zuckerberg said at the time. “But obviously if we get to a point where we feel that we have overbuilt, then that is an option that we have, and that is partially what gives us confidence in investing in building this out.”
Zuckerberg has repeatedly argued that computing capacity remains one of the biggest constraints in the AI industry, supporting Meta’s strategy of aggressively expanding its AI infrastructure while determining additional commercial uses for that capacity over time.
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