Commenting on Meta’s Q2 results, Amelia MacPherson, Media and Technology Senior Analyst at RSM UK said: “Meta’s Q2 earnings per share missed expectations, and its free cash flow levels have declined. As with other tech giants, investors are questioning whether the surge in AI spending will generate meaningful returns. Those concerns have only intensified following this week's announcement that Meta and BlackRock plan to develop a 1-gigawatt AI data centre in Texas, underscoring the race of the technology giants to build AI infrastructure, despite ongoing questions over the timeline for monetisation.

“Investors will also be looking for insight into how Meta plans to monetise its significant AI investment (which Meta says could be as much as $145bn this year) beyond advertising and accelerating its core business. This includes whether parts of its AI infrastructure could eventually be made available to third parties. However, with Zuckerberg previously indicating that Meta does not have surplus computing capacity, the company faces a strategic balancing act between generating new AI-related revenue streams and meeting its own increasing demand for compute power.

“Access to high-performance compute is becoming one of the key constraints in developing advanced AI models, with demand currently outstripping available data centre capacity. While technology companies are committing hundreds of billions of dollars to AI infrastructure, investors are increasingly asking when these investments will translate into meaningful revenue streams, and whether the returns will justify the scale of capital expenditure.”

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