Meta Is Raising Nearly $100 Billion for AI and Nvidia Just Put In $3 Billion

Keypoints:

• Meta announced a plan on October 26 to raise up to $95 billion, then upsized it to $97.5 billion on Tuesday
• It is the largest fundraising in the company's history
• Nvidia will invest $3 billion and AMD will invest $1 billion in the offering
• The money will fund AI data centers and Meta's Muse AI agent
• Critics say chip makers investing in their own customers creates "circular" financing

Meta has just announced the biggest fundraising in its history, and almost everything about it comes down to AI. On Monday the company said it wanted to raise up to $95 billion to pay for its AI infrastructure. On Tuesday it increased the plan to $97.5 billion.

Here is how it works. The first $35 billion comes from selling stock to the public. That is $22.5 billion in common shares and $12.5 billion in a special type of preferred stock that later converts into regular shares. 

Meta then increased the common stock part to $25 billion and priced the shares at $625 each. The remaining $60 billion will come through what is called an at-the-market program, where a company sells shares gradually over time. That part is expected to start after Meta's new nonvoting Class C shares begin trading in early 2027.

Meta's own chip suppliers are joining in. Nvidia said it will invest $3 billion in the offering, and AMD said it will put in $1 billion. Meta had said that Nvidia, AMD and Broadcom were interested in buying up to $5 billion of shares in total. Nvidia also said the two companies will work together to improve how well Meta's Muse AI models run, and Meta will expand its use of Nvidia's newest chip systems. Nvidia CEO Jensen Huang described AI agents as software that understands your goals and gets work done for you.

It is unusual for a company as rich as Meta to sell this much stock. Alphabet and Intel also sold shares earlier this year, which shows how huge AI spending bills have become.

That is also why some people are nervous. When chip makers invest in the same companies that buy their chips, critics call it circular financing, because the money can flow back to the investor as sales. Meta's shares dropped 6% on October 22 after it signaled higher spending, and its credit risk hit a record high that day.

Supporters see it differently. One analyst said the raise shows how confident Meta is about long term returns from AI, and also how capital hungry the race has become.