Meta is building a cloud business to sell its excess AI computing power to outside customers, CNBC confirmed on Wednesday. The company's shares rose 8% on the news, which was first reported by Bloomberg. Meta is debating whether to offer access to AI models hosted on its infrastructure or to sell raw computing power. The move aims to help recoup some of the billions of dollars the company has invested in artificial intelligence infrastructure. Meta told investors in April that it plans to spend up to $145 billion on capital expenditures this year for data centers and graphics processing units needed to train AI models.
Meta Considers Two Cloud Service Models
According to Bloomberg, Meta is debating between two approaches for its cloud business. The company could offer access to AI models that are hosted on its infrastructure, or it could sell access to raw computing power. A representative for Meta did not immediately respond to CNBC's request for comment on the specific approach the company will take.
Meta Plans $145 Billion AI Infrastructure Spending
Meta told investors in April that it plans to spend as much as $145 billion on capital expenditures this year as it continues developing data centers and securing the graphics processing units needed to train AI models and run large workloads. Model developers, including Meta, have been racing to secure computing power since OpenAI launched its ChatGPT chatbot in 2022, and demand far outpaces supply. The new cloud business could generate revenue on the capacity Meta is not using.
SpaceX Sells Excess Compute to Anthropic and Google
Meta is following the lead of Elon Musk's SpaceX, which has also started selling excess computing capacity this year. SpaceX has inked deals with Anthropic, which has agreed to pay $1.25 billion per month for capacity, and Google, which has agreed to pay $920 million a month. The new business would throw Meta into a fiercely competitive market dominated by companies including Amazon, Microsoft, Google and CoreWeave.
Meta Hired Alexandr Wang and Launched Muse Spark Model
Meta has spent $14 billion to bring in Alexandr Wang from Scale AI last year. The company debuted its first model under Wang's leadership, Muse Spark, in April, which it positioned as a "powerful foundation," not a state-of-the-art offering.
FAQ
What did Meta announce on Wednesday?
Meta announced it is building a cloud business to sell its excess AI computing power to outside customers. CNBC confirmed the news on Wednesday, which was first reported by Bloomberg. The company's shares rose 8% on the announcement.
How much is Meta spending on AI infrastructure this year?
Meta told investors in April that it plans to spend up to $145 billion on capital expenditures this year. The spending will go toward developing data centers and securing graphics processing units needed to train AI models and run large workloads.
What deals has SpaceX made for selling excess computing capacity?
SpaceX has inked deals with Anthropic, which has agreed to pay $1.25 billion per month for capacity, and Google, which has agreed to pay $920 million a month. Meta is following SpaceX's lead by starting to sell its own excess computing capacity this year.
