Meta creates non-voting shares to fund its massive AI ambitions

Meta is betting big on artificial intelligence, but paying for that future is becoming a logistical challenge. To keep its current ownership structure intact while still raising the massive capital required for AI development, the company is introducing a new type of stock. These shares will allow Meta to bring in fresh money or compensate employees without giving new shareholders a say in how the company is run, a move that protects the influence of its existing stakeholders.

The idea is not entirely new, but the scale is. For years, Meta has operated with a dual-class structure that keeps control in the hands of its founders. Now, the company is expanding that toolkit. On Wednesday, during its third-quarter earnings call, the firm officially confirmed reports that it would issue non-voting capital stock. This new class of shares is designed specifically for capital raising, acquisitions, and employee compensation, ensuring that the voting power remains with the holders of the existing Class A and B shares.

This strategy follows a pattern of aggressive expansion. Over the past year, Meta has shifted its focus heavily toward AI, releasing a suite of new models including Muse Spark, Muse Glimmer, and the open-weight Muse Spark Open. The company also launched Muse Code, a tool for software developers, and unveiled a line of cute, cuddly avatars for its AI assistant at its recent Connect event. These moves are part of a broader effort to make AI feel more personal and accessible to everyday users.

The financial results for the quarter show the scale of this operation. Meta reported $64 billion in revenue, a 26% increase from the same period last year. However, the company’s costs and expenses surged by 68% over the same timeframe. This sharp rise in spending reflects the heavy investment going into AI infrastructure and development. While the numbers beat Wall Street expectations, the cost structure highlights just how expensive this technological race has become.

Not all parts of the business are seeing such rapid growth. Reality Labs, the division behind Meta’s virtual and augmented reality hardware, continues to operate at a loss, though the bleeding is slowing. The company expects this division’s losses to narrow to between $18 billion and $19 billion, down from its 2025 levels. This steady decline in losses suggests that while the metaverse push is not yet profitable, it is becoming more sustainable.

The new non-voting shares are a key piece of this financial puzzle. Susan Li, Meta’s chief financial officer, explained that this new stock class is intended to preserve the founder-led structure while providing flexibility. By creating a publicly traded non-voting stock, Meta can raise capital for its "unprecedented momentum" in AI without altering the balance of power among its current major shareholders. This gives the company more tools to invest in its growth without the friction of complex voting rights negotiations.

Looking ahead, the company is confident in its AI trajectory. CEO Mark Zuckerberg noted that more than 10 million people in the U.S. and Canada have set up Muse personal agents in just a month and a half. He described the product as having found clear product-market fit, with the company now entering a phase focused on scaling. Zuckerberg aims to grow the service to eventually serve billions of people, a goal that requires the very capital this new stock is designed to attract.

Despite the strong growth, some risks remain. Li acknowledged that ongoing legal and regulatory issues could impact the company’s financial results. Specifically, she pointed to scrutiny regarding youth-related issues in several markets, with several trials scheduled in the coming months in the United States. These legal battles could add to the complexity of Meta’s operations, but the company remains focused on leveraging its new financial tools to stay ahead in the AI race.