Meta Spends $50 Billion More on AI. is That a Good Thing?

Dow Jones01:39

Meta Platforms isn't letting up in its artificial-intelligence push. It's now investing more than $50 billion in a Louisiana data center. Still, J.P. Morgan isn't so sure that's a good thing.

On Monday, Meta said it would increase the size of its data-center project in Northeast Louisiana to five gigawatts of compute capacity, raising the cost to more than $50 billion, up from an initial estimated $27 billion.

It's just one more signal that CEO Mark Zuckerberg isn't ready to pull back on AI spending, despite Wall Street worries that Meta lags behind the likes of ChatGPT-developer OpenAI or Claude maker Anthropic.

Also on Monday, J.P. Morgan's Doug Anmuth reiterated a Neutral rating and $725 target price on Meta stock. He argued that Meta's update to its Muse Spark AI model was encouraging, but that the company hasn't adopted AI more widely.

"We're optimistic on early signs of AI monetization beyond digital advertising, but much will depend on traction of Muse Spark 1.1 & the subsequent Watermelon, and whether Meta gains trust from developers & enterprises," Anmuth wrote.

In midday trading, the stock was down 1.3% at $660.87. Shares are up 17% for the year.

Meta wants to double its computing capacity to 14 gigawatts next year, according to a Reuters report last week. A typical one-gigawatt AI data center requires $38 billion in upfront capital expenditure according to analysis firm Epoch AI -- so Meta's reported plan would imply roughly $266 billion in capex.

The social-media company isn't bearing the full cost of the buildout. Private-credit manager Blue Owl Capital owns a major stake in the Louisiana project, which has attracted investors including BlackRock, The Wall Street Journal reported.

"Meta pays the full costs of the energy, water, and related infrastructure the [Louisiana] data center uses so consumers aren't paying the cost," Meta said on its website.

Write to Adam Clark at adam.clark@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

July 13, 2026 13:39 ET (17:39 GMT)

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Meta Spends $50 Billion More on AI. is That a Good Thing?

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