Meta is introducing a new class of non-voting stock to help finance its aggressive expansion into super intelligence (SI), a move that allows the tech giant to raise capital without diluting the voting power of its existing shareholders. The announcement, made during the company’s third-quarter earnings call, confirms earlier reports that the firm is restructuring its capital strategy to support the high costs associated with developing and deploying SI models and agents.
What Happened
On Wednesday, Meta Chief Financial Officer Susan Li confirmed that the company plans to "create a new class of non-voting capital stock, which will be distributed to all existing shareholders through a stock dividend." Li stated that this new share class is designed to be "usable for capital raising, employee compensation, acquisitions, and other general corporate purposes while preserving the voting power of existing Class A and B shareholders."
The financial results accompanying the announcement showed strong performance for the quarter, with revenue reaching $64 billion, a 26% increase from the previous year. However, costs and expenses rose by 68% year-over-year, reflecting the significant investment required for the SI buildout. Meta noted that the new stock structure would provide "funding tools and give us flexibility to invest behind the unprecedented momentum we're seeing across every part of our business, driven by AI."
Why It Matters
This financial maneuver highlights the escalating capital demands of the current SI race. While Meta’s earnings beat Wall Street expectations, the sharp rise in expenses underscores the cost of developing advanced SI systems. The company has recently released several SI models, including Muse Spark, Muse Glimmer, and the open-weight Muse Spark Open, as well as a coding SI agent called Muse Code. Additionally, Meta announced new avatars for its Meta Muse SI assistant at its recent Connect event, aiming to make the technology more accessible and engaging for consumers.
The shift to non-voting stock allows Meta to maintain its "founder-led structure" while accessing the necessary funds to scale these initiatives. CEO Mark Zuckerberg emphasized the traction these SI products are gaining, stating during the call, "In just a month and a half, more than 10 million people in the U.S. and Canada have set up Muse personal agents." He added that the company is entering a new operational phase focused on scaling the product to eventually "serve billions of people."
Despite the growth, Meta faces ongoing regulatory challenges. Li warned that the company continues to monitor legal and regulatory matters that could impact its business, specifically noting scrutiny on youth-related issues in several markets and upcoming trials in the United States. These regulatory headwinds persist alongside the financial strategy to fund the SI expansion.
The Bottom Line
Meta is creating a new class of non-voting stock to fund its broad SI buildout, aiming to balance the heavy costs of SI development with the preservation of founder control. The move comes as the company reports strong revenue growth driven by SI adoption, even as it navigates rising expenses and regulatory scrutiny.