Social media firm Meta could spend up to $37 billion on new digital infrastructure this year, $2bn more than previously anticipated.
Facebook’s parent company outlined its revised plans as it released its financial results for the final quarter of 2023 this week, reporting revenue of $40bn for the three months to the end of December, 25 percent up on the previous year.
The business’s overall 2023 earnings were $134.9bn, a 16 percent increase on 2022.
Meta’s CapEx investment plans explained
With the financial outlook better than anticipated, Meta is upping its capital expenditure (CapEx) for the year ahead, and now expects to pump between $30-$37bn into infrastructure projects in the next 12 months, a $2bn increase on the high end of the previously expected range.
The company’s CFO Susan Li said in a statement to shareholders that continued investment in the hardware needed to train and run artificial intelligence systems would necessitate an increase in spending.
“We expect growth will be driven by investments in servers, including both AI and non-AI hardware, and data centers as we ramp up construction on sites with our previously announced new data center architecture,” Li said.
“Our updated outlook reflects our evolving understanding of our AI capacity demands as we anticipate what we may need for the next generations of foundational research and product development.
“While we are not providing guidance for years beyond 2024, we expect our ambitious long-term AI research and product development efforts will require growing infrastructure investments beyond this year.”
On a call with analysts, Li said the precise amount of CapEx spending Meta needs will depend on demand for AI services as well as the availability of components. She said the company is keeping a “close eye” on the supply of technology such as GPUs, which are key for training and running AI systems.
“Where we land in that range is a function of both the supply and demand factors I mentioned,” Li said. “And this continues to be a pretty dynamic planning process for us.”
There are also “other factors that drive uncertainty,” the Meta CFO explained. These include "how quickly can we execute on the new data center architecture [and] how the supply chain turns out to unfold over the course of the year," she said.
Li added: "Our expectation is, generally, that we will need to invest more to support our AI work in the years ahead, and we're seeing some of that reflected in 2024."
Meta’s new data center strategy
Meta is redesigning its data centers for the AI era, with new cooling and power management systems. It also claims to have slashed the cost of construction by 31 percent, as well as reducing construction times by half.
"We saw the writing on the wall for the potential scale of this technology about two years ago,” Alan Duong, Meta’s global director of data center engineering, told DCD in an interview last year.
So far the company has two of the new-look data centers in the pipeline, currently under construction in Kuna, Idaho, and Temple, Texas.
Meta is also reportedly looking to use more of its own silicon in its data centers to reduce its reliance on GPUs from vendors such as Nvidia.
