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Meta shares fall 6% as AI spending turns free cash flow negative
Meta shares fell about 6% after third-quarter results showed spending on artificial intelligence pushed free cash flow negative. Prices of Meta's five-year credit default swaps reached record highs, CNBC reported, a sign of investor concern about its credit.
Why it matters
Meta's results add to investor questions about how large technology companies finance AI infrastructure.
Background
Meta, owner of Facebook, Instagram and WhatsApp, has committed very large sums to AI data centers. Other AI infrastructure firms such as CoreWeave have also seen credit spreads widen this month.
The story so far
- Character.ai files for bankruptcy citing costs and lawsuits
- Character.ai files for bankruptcy citing costs and teen-suicide lawsuits
- Meta shares fall 6% as AI spending turns free cash flow negative
- Meta, SpaceX and Microsoft move billions on AI
- Meta to raise $95 billion for AI; Nvidia, AMD invest $4 billion
- AI data center debt raises bubble fears
- AI spending: Meta bond sale and UK data centers
Sources
- CNBC ↗Oct 22, 1:48 PM ET
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