Two of the biggest AI spenders reported on the same day. Microsoft’s spending showed up as cloud revenue. Meta’s showed up as a hole in its cash flow.
Meta’s revenue rose 28% to $60.8bn, beating forecasts, CNBC reported. But profit fell 14% to $15.8bn, earnings per share missed, and the shares dropped about 5% after hours.
The cash is draining out
The starkest number is free cash flow. It fell to $784m, from $8.55bn a year earlier, a 91% drop, Reuters reported. Meta is now spending faster than the money is coming in.
The reason is the AI build-out. Meta spent about $31bn on capital projects in the quarter alone, and narrowed its full-year guidance upward, to between $130bn and $145bn, it said. Last year it spent $72bn. The bill is roughly doubling.
