Meta Inc. (META) is reportedly gearing up to sell computing power, similar to what Amazon (AMZN) offers with AWS and Microsoft (MSFT) with Azure. This move appears to be a response to increased AI expenditures and a bid to create new revenue streams.
The proposed strategy involves establishing a new segment within Meta to offload excess computing capacity to outside clients, as noted by sources.
Meta might host AI models in its own data centers, allowing developers to pay for access. Additionally, there are considerations—much like offerings from CoreWeave (CRWV)—for a neo-cloud service that would allow access to Meta’s hardware.
In reaction to this news, Meta’s stock saw an uptick of over 9%.
Mark Zuckerberg, the CEO of Meta, had previously hinted at the possibility of a cloud business on a call with investors, though he stopped short of confirming that the strategy was in active pursuit.
“Almost every week, various companies inquire about launching an API with us. We often ask if they have the computing capacity to offer a service or if they’re willing to pay a premium for what we use,” Zuckerberg shared during a shareholder meeting in May.
“We haven’t made any moves yet, as we believe there are still uses for our computing resources. However, if we find ourselves with excess capacity, that’s certainly an option for us, which adds to our confidence in this investment,” he continued.
This venture into cloud computing could help Meta lessen its heavy dependence on advertising revenue.
The company has already invested billions into AI infrastructure, technology, and top-tier talent to better position itself competitively against leading AI firms such as OpenAI (OPAI.PVT), Google (GOOG, GOOGL), Anthropic (ANTH.PVT), and Microsoft.
Following a lukewarm public reception to the Llama 4 AI model, Zuckerberg revamped the AI strategy by bringing in Alexander Wang, founder and CEO of Scale AI, to serve as Meta’s chief AI officer, while also running the Meta Superintelligence Labs.
However, investor confidence regarding Meta’s AI ventures seems shaky. Over the last year, Meta’s stock has dropped more than 23%, and it’s down about 14% since the start of this year. This new business direction may help alleviate concerns on Wall Street and potentially enhance Meta’s profits.
