Meta Is Spending $145 Billion on AI and Cutting 8,000 Jobs
3 min readMeta just reported its strongest revenue growth since 2021, then watched its stock fall 8 percent. The reason: the company told investors it plans to spend up to $145 billion on AI infrastructure this year and is cutting 8,000 jobs to help fund the push.
Background
Meta has been building AI into its core products for years. Its recommendation engines, ad targeting systems, and content moderation tools all run on machine learning. But the scale of investment the company is now describing is categorically different from anything it has done before. The new $125 to $145 billion capital expenditure forecast for 2026 is larger than everything Meta spent on AI in 2024 and 2025 combined.
What Happened
Meta reported Q1 2026 earnings on April 29, posting revenue of $56.3 billion, up about 33 percent year over year. EPS came in at $10.44, beating analyst expectations. But the headline that overshadowed the strong results was the updated capex forecast. The company raised its 2026 spending range from $115 to $135 billion up to $125 to $145 billion, citing higher component costs and a more aggressive buildout of AI data center infrastructure.
At the same time, Meta announced plans to cut approximately 8,000 jobs. CEO Mark Zuckerberg tied the restructuring directly to the company’s AI priorities, framing the layoffs as part of a broader shift toward AI-driven operations across the business.
When an analyst asked Zuckerberg for concrete signs of return on investment from all this spending, his answer raised eyebrows. He called it a “very technical question” and said the company sees positive signals internally and across the industry. That response quickly became the centerpiece of investor concern, and Meta’s stock fell roughly 8 percent in after-hours trading.
Why It Matters
The combination of record AI investment, job cuts, and an evasive ROI answer puts Meta’s strategy under a spotlight that will be hard to step out of. Other major tech companies are spending heavily on AI infrastructure, but Meta’s $145 billion forecast is among the largest in the industry. With that much committed and 8,000 workers on their way out, the company is betting that AI will not just support its business but replace large portions of the human infrastructure it has built over two decades.
There are early signs the bet is producing results. More than 500 million users watch AI-dubbed video content on Facebook and Instagram each week. Ad targeting powered by AI has improved engagement metrics. But the gap between those incremental gains and the size of the investment is exactly what investors are pressing the company to explain.
What to Watch
Meta’s Q2 2026 guidance projects revenue of $58 to $61 billion. If the company can show that AI spending is driving meaningful ad revenue growth, the stock drop may look like an overreaction. If not, the pressure from investors to justify the capex will intensify heading into the second half of the year.