Meta raises $97.5b for AI push as share offering draws 5x oversubscription

Meta has expanded its fundraising target to $97.5 billion to build out AI infrastructure, after buy orders for its common share offering came in at roughly five times the available supply, prompting the company to increase the size of the raise beyond its original plan. Key AI semiconductor partners, including Nvidia and AMD, also joined the investment.

On Tuesday (local time), Meta said it would increase its Class A common share offering from $22.5 billion to $25 billion, a $2.5 billion expansion. That pushed the total fundraising target up from the originally announced $95 billion to $97.5 billion.

Meta priced the common shares at $625 each, roughly 2.7 percent below the closing price of $642 on Friday — the last trading day before the offering was announced. A total of 40 million shares will be issued.

A concurrent convertible preferred share offering was set at $50 per share, with 250 million shares to be issued.

The raise drew strong interest from institutional investors. Bloomberg, citing sources, reported that buy orders for Meta's common share offering reached approximately five times the number of shares on offer.

More than half of the offering was allocated to long-term investors and existing shareholders. The top 15 institutional investors took up 70 percent of the total, and the convertible preferred share offering was also several times oversubscribed.

Meta's core AI semiconductor partners committed substantial equity investments. Nvidia will invest $3 billion in the share offering, while AMD will put in $1 billion.

Nvidia CEO Jensen Huang said the company is "expanding its partnership with Meta to optimize computing infrastructure from the ground up."

Meta had announced the overall $95 billion fundraising plan on Monday, saying the capital was needed to expand AI infrastructure and develop personal superintelligence.

The fundraising draws on a mix of common and convertible preferred share issuances, along with open-market sales of newly created Class C non-voting shares. The subsequent increase to the common share offering pushed the total to $97.5 billion.

The large-scale capital raise comes as heavy AI spending has squeezed Meta's cash flow. The company posted a free cash flow deficit of $2.12 billion in the third quarter, underscoring the growing financial pressure.

Meta's share price has declined since the capital raise was announced. The stock fell about 2 percent during regular trading on Tuesday and slipped an additional 1 percent or so on Wednesday.

As of 2:45 p.m. Eastern time, Meta shares were trading at around $622.