Meta signals massive 2026 AI spending surge, plans up to $135 billion outlay

Meta CEO Mark Zuckerberg

• Meta to spend $115-135B on AI in 2026, nearly double last year's budget
• The surge is driven by increased investment in Meta Superintelligence Labs efforts
• Despite the meaningful step up in infrastructure investment, Meta expects to deliver higher operating income in 2026

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Facebook parent Meta signalled a massive escalation in its artificial intelligence (AI) spending, as it races to establish the social media giant as the leading frontier AI lab in the red-hot AI arms race with rivals like OpenAI, Google, and Microsoft.

The company projected its capital expenditure for 2026 at $115 billion to $135 billion, nearly double the $72 billion it spent last year. This figure itself was a two-fold increase over the $39 billion spent in 2024.

What is driving Meta's AI spending increase?

The surge is driven by increased investment to support its Meta Superintelligence Labs efforts and core business, the firm said.

"We are seeing a major AI acceleration. I expect 2026 to be a year where this wave accelerates even further on several fronts," Meta CEO Mark Zuckerberg said during the company's earnings conference call on January 28 "We are starting to see agents really work. This will unlock the ability to build completely new products and transform how we work."

"This is going to be a big year for delivering personal super intelligence, accelerating our business, building infrastructure for the future, and shaping how our company will work going forward," he said.

Earlier this month, Zuckerberg unveiled a new “top-level” initiative called Meta Compute, through which Meta aims to build tens of gigawatts this decade, and hundreds of gigawatts or more over time.

The tech giant also hired Dina Powell McCormick, a former Donald Trump administration adviser and long-time Goldman Sachs partner, as President and Vice Chairman to focus on partnering with governments and sovereigns to build, deploy, invest in, and finance Meta's AI and infrastructure.

"An important part of Meta Compute will be making long term investments in silicon and energy. We will continue working with key partners while advancing our own silicon program," Zuckerberg said "We're architecting our systems so that we can be flexible in the systems that we use, and we expect the cost per gigawatt to decrease significantly over time through optimizing both our technology and supply chain."

What are Meta's key cost drivers?

Meta expects its total expenses to be in the range of $162-169 billion for 2026, a significant leap from $118 billion it spent in 2025. The ramp-up is driven by infrastructure costs, which includes third-party cloud spend, higher depreciation, and higher infrastructure operating expenses.

Another major cost driver is the rising employee compensation as a result of the company's aggressive AI hiring spree. Meta stated that this figure includes 2026 hires to support its priority areas, particularly AI, as well as a full year of expenses from 2025 hires. Over the past year or so, the company offered billion-dollar pay packages to lure top researchers from rivals including OpenAI, Google, Anthropic, and Apple.

That said, Meta cut 10 percent of employees from its Reality Labs division, impacting more than 1,000 jobs. Reality Labs houses the company's virtual reality and augmented reality hardware and software efforts.

The company also laid off around 600 people from its AI division in October 2025, in a bid to operate more nimbly.

How has Meta changed its AI strategy?

These moves come after Meta reset its AI strategy in recent months following a series of setbacks, including the disappointing performance of its flagship AI model Llama 4, delays in launching more-advanced AI models and the departure of several top researchers.

"In 2025, we rebuilt the foundations of our AI program. Over the coming months, we're going to start shipping our new models and products," Zuckerberg said "I expect our first models will be good, but more importantly, we will show the rapid trajectory that we're on. And then I expect us to steadily push the frontier over the course of the year as we continue to release new models."

Despite the meaningful step up in infrastructure investment, Meta stated that it expects to deliver operating income in 2026 that is above 2025 operating income.

For the fourth-quarter ended December 31, 2025, Meta's total revenue rose to $59.89 billion, up 24 percent from a year earlier. Profit increased by 9.2 percent to $22.76 billion.

"We're working on merging LLMs with the recommendation systems that power Facebook, Instagram threads, and our ad system. Our world class recommendation systems are already driving meaningful growth across our apps and ads business. But we think that the current systems are primitive compared to what will be possible soon," Zuckerberg said.

The Meta chief said that more than 3.5 billion people now use atleast one of Meta's apps everyday. This includes two billion daily active users each on Facebook and WhatsApp and nearly two billion users on Instagram.