Meta stock rises 3% after $27 billion AI infrastructure deal
Meta's stock jumped nearly 3% in pre-market trading following the announcement of a $27 billion deal with Dutch cloud provider Nebius to enhance its artificial intelligence (AI) infrastructure. The company also revealed plans to lay off 20% of its workforce, approximately 15,800 employees, to balance the rising costs of its AI investments.
Highlights
- Meta has signed an agreement worth up to $27 billion with Nebius to expand AI capabilities.
- Meta plans to invest up to $135 billion in AI in 2026.
- The company also plans to lay off 20% of its workforce to balance AI-related costs.
Investment in AI infrastructure
According to CNBC, the agreement with Nebius includes $12 billion allocated for computational resources and an additional $15 billion over the next five years.
Over the next five years, Nebius will provide computing power worth $12 billion across several regions, including what the company claims to be one of the first large-scale deployments of the latest Nvidia chips.
Additionally, Meta has committed to purchasing further computing power from Nebius, totaling up to $15 billion over the next five years.
Meta also confirmed that its AI expenses this year could reach $135 billion. These investments are expected to support the company’s continued growth in the AI sector.
Mass layoffs to balance costs
Along with the new investments, Meta announced plans to lay off more than 20% of its workforce — about 15,800 employees out of 79,000. This decision is aimed at balancing the rising costs associated with AI while optimizing the company’s overall expenses.
The layoffs are seen as a move to enhance operational efficiency and improve financial stability.
Importance for the сompany and market
Meta's stock increased by 3% in pre-market trading after announcing a $27 billion deal.
The rise in Meta's stock value reflects a positive reaction from investors to the company's announcement. The large-scale AI investments could lead to more effective resource allocation and long-term growth.
However, it is important to note that mass layoffs may pose reputational risks to the company, which investors and analysts should consider when predicting Meta's future growth.
As previously covered negative momentum and failed moving averages drive Meta stock decline.
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