Meta’s $145 Billion AI Bet: 8,000 Jobs Cut to Fund a Massive Infrastructure Buildout

Meta Platforms delivered a strong first quarter, with revenue jumping 33% to $56.3 billion and net income surging 61%. But the market punished the stock, sending shares down as much as 10% in after-hours trading. The reason? A jaw-dropping increase in capital spending.

The company now expects to spend between $125 billion and $145 billion on infrastructure in 2026, up from a prior range of $115 billion to $135 billion. CFO Susan Li cited higher costs for memory chips and data center expansions needed to support future capacity. That spending dwarfs revenue growth and has investors questioning when the payoff will arrive.

To fund this sprint, Meta is cutting roughly 8,000 jobs—about 10% of its workforce—effective May 20, and scrapping 6,000 open positions. Chief People Officer Janelle Gale described the cuts as structural moves aimed at efficiency. CEO Mark Zuckerberg frames the shift as AI amplifying human work, not replacing it. Teams are now organized into small “AI pods,” and what once took dozens of people months now takes one or two people weeks.

The capex explosion is staggering. Meta inked deals with Amazon Web Services for Graviton chips, plus CoreWeave, Google, Nvidia, and others. Superclusters in Ohio and Louisiana demand gigawatts of power, and a $10 billion data center in El Paso targets 1 gigawatt by 2028. Meanwhile, Reality Labs continues to bleed cash, posting another $4 billion operating loss in Q1. Zuckerberg is pivoting toward AI wearables, away from the metaverse dream.

User growth stuttered slightly, with daily active people dipping 20 million to 3.56 billion, partly due to Iran internet disruptions and Russia’s WhatsApp ban. But ad revenue remains strong. Wall Street is watching closely: Big Tech’s combined Q1 capex hit $133 billion, up 70% year over year, and depreciation is now eating into earnings.

Zuckerberg is betting it all on AI. “We’re on track to deliver personal superintelligence to billions of people,” he said. But with $175 billion in market value erased and analysts split between discipline and margin squeeze, 2026 will be the ultimate test of whether this gamble pays off.

Source: Webpronews