Meta is doubling down on artificial intelligence (AI), committing billions of dollars to the technology even as it trims thousands of jobs across the company. CEO Mark Zuckerberg has argued that AI is not meant to replace workers but to make them more productive, saying greater efficiency could ultimately lead to the creation of more jobs.
Speaking on Complex’s Idea Generation podcast, Zuckerberg said AI should be viewed as a tool that enhances employee productivity rather than one that eliminates roles.
His remarks come shortly after Meta announced one of its largest rounds of layoffs, cutting around 8,000 jobs, or nearly 10% of its global workforce, as part of a broad restructuring effort, according to Firstpost. The job cuts affected multiple divisions, including Integrity, cybersecurity and content design teams.
Meta restructures around AI
Employees in the United States who were laid off received severance packages, while roughly 7,000 existing employees are being reassigned to AI-focused roles. The company is also eliminating about 6,000 unfilled positions as part of its organisational overhaul.
During Meta’s latest earnings call, Zuckerberg said advances in AI have reduced the need for larger teams to perform certain tasks, prompting the company to rethink the size of several departments.
Meta now expects to spend between $125 billion and $145 billion in capital expenditure this year, nearly double last year’s investment. The bulk of the spending will go towards expanding AI data centres, purchasing advanced AI chips and training next-generation AI models through its Meta Superintelligence Labs.
According to CNBC, Meta is also planning to monetise its AI infrastructure by selling unused computing capacity to businesses. Bloomberg reported that the company is evaluating whether to offer customers access to its AI models or simply provide raw computing power through cloud services. The announcement was well received by investors.
Stock rallies on AI infrastructure plans
Meta’s shares surged 9% in a single trading session, marking their biggest one-day gain in more than five months, as investors welcomed the prospect of revenue streams beyond digital advertising.
Investors have increasingly urged Meta to generate returns from the massive investments it is making in AI infrastructure and data centres.
Earlier this year, Meta raised the upper end of its 2026 capital expenditure guidance by another $10 billion, taking the total planned investment to $145 billion. To help finance those plans, the company also raised $25 billion through a bond offering.
Advertising continues to account for roughly 98% of Meta’s revenue, and most of the company’s AI investments so far have focused on improving its advertising business.
Concerns over cloud expansion
Despite the market’s positive reaction, analysts have cautioned that expanding into cloud services could weigh on Meta’s profitability.
Cloud businesses typically require extensive enterprise sales teams and customer support operations, making them significantly more expensive to run than advertising platforms. As a result, they generally operate with lower profit margins.
Meta currently enjoys some of the strongest margins in the technology sector, reporting a gross margin of 82% and an operating margin of 41%, according to CNBC.
Google’s cloud business offers a cautionary example
Analysts point to Google’s financial performance as an example of the challenges involved. While Google’s advertising business generates operating margins of around 42%, its cloud division operates at roughly 18%.
Investment strategist Paul Meeks said Meta already has one of the strongest business models in the technology industry because of its advertising business. He argued that moving deeper into cloud computing could dilute the company’s overall profitability.
According to Meeks, Meta may generate stronger long-term returns by continuing to use AI to improve its own products and services rather than competing directly in the highly competitive cloud infrastructure market.
For now, Meta is attempting to balance three major priorities simultaneously: reducing costs through workforce restructuring, investing heavily to establish itself as an AI leader, and building new revenue streams beyond advertising. While investors are optimistic about the company’s AI ambitions, many also expect profit margins to come under pressure if Meta significantly expands its cloud computing business.
