Background: Meta is the parent company of Facebook, Instagram and WhatsApp, with its apps used by roughly 3.58 billion people every day. Over the past few years, the company’s heavy spending on the metaverse weighed on profitability and put pressure on its share price.

What happened: Meta has now delivered huge earnings results. Get this: its quarterly revenue reached nearly $60 billion USD, up 24%, while net income rose to almost $23 billion USD, up 9%. These are both record quarterly figures. Alongside the results, Meta announced plans to spend between $115 billion and $135 billion USD on capital expenditure in 2026 (which is almost double its 2025 spend of $72.2 billion USD).

What else: The majority of this investment will be directed toward Meta’s new Superintelligence Labs, as it pushes hard to compete with Google, OpenAI and Anthropic. And this just shows how how capital-intensive it has become to build advanced AI models.

What's the key learning?

💡AI is quickly becoming a game where scale matters. Developing and operating large-scale models requires enormous upfront investment in chips, data centres, energy and networks.

💡Capital intensity is emerging as a competitive advantage. Only a small number of companies can afford to invest more than $100 billion a year in AI, effectively raising barriers to entry across the industry.

💡Meta is prioritising long-term positioning over near-term efficiency. By investing heavily and early, including aggressively recruiting top AI talent, Meta is aiming to secure a durable competitive position — even if it pressures margins in the short term.