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Meta shares AI infrastructure costs with $2 billion in asset sales

Meta Platforms continues to push forward with its efforts to find outside partners who can help fund the massive infrastructure required to power artificial intelligent. In a Thursday filing, Meta Platforms revealed plans to sell $2 billion worth of data center assets to achieve this strategy.

This strategy is part of a wider shift in the tech giants' approach to growth. They are no longer self-funding their own growth, but instead they have been forced to deal with the rising cost of data centers and energy for generative AI. The social media giant announced earlier this week it was looking into ways to collaborate with financial partners in order to co-develop its massive capital expenditure for next year.

Meta's Chief Financial Officer Susan Li stated on Wednesday during a conference call following the company's earnings.

Li stated that while the company will continue to fund a large portion of its capital expenditures internally, certain projects may attract "significant" external financing and provide more flexibility as infrastructure needs change over time.

She said that the company had no finalized transactions she could announce.

Meta's quarterly report, however, indicates that plans are becoming more concrete. In its quarterly filing on Thursday, Meta said it had approved a plan in June to dispose of certain data center assets and reclassified $2.04 billion worth of land and construction-in-progress as "held-for-sale".

The assets would be transferred to a third-party within the next 12 months to co-develop data centers.

Meta did not report a loss for the reclassification. The assets are valued at the lower value of the carrying amount or the fair value less the costs to sell. According to the filing, total assets held for sale stood at $3.26billion as of June 30.

Meta declined to comment on this article.

Mark Zuckerberg, CEO of Facebook, has announced plans to invest hundreds billions of dollars in building "superclusters", or AI data centers for superintelligence.

He said that "just one of these covers an important part of Manhattan's footprint."

Instagram and WhatsApp's owner raised its forecast for annual capital expenditures by $2 billion on Wednesday, from $66 billion to $75 billion.

It reported stronger-than-expected ad sales, boosted by AI-driven improvements to targeting and content delivery. The executives said that these gains helped offset the rising costs of infrastructure associated with its long-term AI initiative. (Reporting and editing by Sayantani ghosh and Marguerita choy in New York)

(source: Reuters)