tech
Meta’s AI bets are swallowing almost all its free cash flow
Meta's AI investments cut free cash flow by 91%, while ad revenue rose 27% as AI boosts ad targeting and content recommendations.
TL;DR
- Meta's free cash flow dropped 91% year-over-year to $784 million in Q2 2026.
- Capital expenditures on AI infrastructure surged 83% to $31.08 billion, nearly eliminating free cash flow.
- Advertising revenue increased by 27%, driven by AI-powered improvements in content recommendations and ad matching.
- Meta overhauled its AI operations under Meta Superintelligence Labs in 2025, releasing models like Muse Spark and Muse Image.
- The company anticipates capital expenditures of up to $145 billion for the current year.
- Other Big Tech companies are also investing heavily in AI infrastructure, with collective spending exceeding $700 billion this year.