Meta unveils new non-voting shares to fund massive AI expansion

Meta generated $64 billion in revenue during the third quarter, a 26% increase from the same period last year, and is now leveraging this financial strength to fund its aggressive push into artificial intelligence through a newly created financial instrument. The company confirmed on Wednesday that it intends to issue a new class of non-voting capital stock. This move allows the firm to raise funds without diluting the voting power held by existing Class A and Class B shareholders, a strategy that maintains its current founder-led governance structure.

During the earnings call, Chief Financial Officer Susan Li detailed the mechanics of this plan. She stated that the company will distribute the new shares to all existing shareholders via a stock dividend. Li explained that the primary goal is to create a publicly traded non-voting stock that can be used for capital raising, employee compensation, and acquisitions. This approach provides Meta with the flexibility to invest heavily in the momentum currently driving its business, which she attributed largely to AI.

While revenue surged, the company’s costs and expenses also climbed significantly, rising 68% year-over-year. This spike reflects the heavy investment required to sustain its rapid growth in technology. Despite the increased spending, Meta’s financial performance exceeded Wall Street expectations for the quarter, signaling strong market confidence in its operational trajectory.

The AI sector remains the central focus of Meta’s strategy. The company has released several models recently, including Muse Spark, Muse Glimmer, Muse Wonder, and Muse Spark Open, the latter of which features publicly available parameters. Meta also launched Muse Code, a tool for software developers, and introduced a line of avatars for its AI assistant at its Connect event. CEO Mark Zuckerberg reported that over 10 million people in the U.S. and Canada have set up Muse personal agents in just six weeks. He noted that the product has maintained the number one position in the App Store almost every day, indicating strong user adoption.

Zuckerberg described the current moment as a transition into a more operational phase focused on scaling the product. He expressed confidence that the service is entering a new stage with clear product-market fit, aiming to eventually serve billions of users. This expansion is supported by the new funding tools that the non-voting shares will provide, ensuring that the company can continue to invest in its AI infrastructure without altering its existing voting dynamics.

However, the company acknowledged that regulatory challenges remain. Li noted that Meta is monitoring active legal and regulatory matters that could impact its financial results. Specifically, the company is facing scrutiny regarding youth-related issues in several markets, with multiple trials scheduled in the United States in the coming months. These legal proceedings represent a lingering risk that the company must navigate while pursuing its ambitious growth targets.

The division known as Reality Labs, which manages AR glasses and VR headsets, continues to operate at a loss, though the deficit is shrinking. The company expects these losses to narrow from 2025 levels to between $18 billion and $19 billion. As Meta balances its financial obligations with its rapid technological advancements, the introduction of non-voting stock offers a strategic path forward, allowing it to secure the necessary capital for its AI future while keeping control firmly in the hands of its current stakeholders.