July 30 (Reuters) - Meta Platforms ( META ) narrowed its
annual capital expenditures forecast on Wednesday, driven by the
social media giant's high-stakes push for "superintelligence" as
the artificial intelligence arms race intensifies in Silicon
Valley.
The Facebook and Instagram parent now expects capital
expenditures to be between $66 billion and $72 billion, compared
with its prior projection of $64 billion and $72 billion.
The move follows a similar announcement by Big Tech rival
Alphabet, which last week raised its capital spending
outlook by $10 billion to $85 billion on the back of strong
AI-driven growth in its search and cloud businesses.
Training and deploying advanced AI systems remain a
capital-intensive endeavor, requiring costly hardware, massive
computing resources and top-tier engineering talent.
After a lackluster reception for its Llama 4 model that led
to staff departures, Meta has tried to revitalize its AI push by
sparking a high-stakes talent war that has seen it dole out more
than $100 million pay packages to researchers from rival firms.
CEO Mark Zuckerberg has pledged to spend hundreds of
billions of dollars to build massive AI data centers, having
shelled out $14.3 billion for a stake in startup Scale AI and
poached its 28-year-old billionaire CEO Alexandr Wang.
To fund the push, the billionaire founder is leaning on
Meta's massive user base as well as AI-powered improvements in
content engagement that make it a stable bet for advertisers
even in times of economic uncertainty.
The social media giant recently introduced an AI-driven
image-to-video ad creation tool under its Advantage+ suite,
allowing marketers to generate video ads from static images.
Instagram, whose Reels product competes with ByteDance's
TikTok and YouTube Shorts for ad dollars in the popular short
video format, is set to account for more than half of Meta's ad
revenue in the U.S. this year, according to research firm
eMarketer.
Meta has also accelerated efforts to monetize its social
media platforms WhatsApp and Threads by integrating ads.
The company last month named insider Connor Hayes as head of
Threads, a sign it was moving the platform away from Instagram's
shadow after leaning on the photo-sharing app for growth.
