"All-In on AI" Meta Issues $30 Billion in Bonds... Stock Plunges 11%

Zuckerberg: "Aggressive Investment Is the Right Strategy"

Meta, the parent company of Facebook and Instagram, is seeking to raise $30 billion (approximately 43 trillion won) through a bond issuance. In the market, Meta's aggressive move has sparked growing concerns about overheating in artificial intelligence (AI) investments, leading to a sharp drop in its stock price.

Reuters Yonhap News

According to Bloomberg and other sources on October 30 (local time), the bond issuance, managed by Citigroup and Morgan Stanley, attracted $125 billion in orders. This marks the largest public corporate bond issuance in history. Meta will issue six types of bonds with maturities ranging from 5 to 40 years. It is reported that negotiations for the longest 40-year bond will begin at a yield approximately 1.4 percentage points higher than that of U.S. Treasury bonds.

Meta is expected to invest the funds raised through the bond issuance in building infrastructure such as AI model development and data center construction. Currently, Meta is building the 'Hyperion' data center with a capacity of 5GW (gigawatts) in Richland Parish, Louisiana. In addition, Meta is constructing the 'Prometheus' data center with a capacity of 1GW in New Albany, Ohio, aiming to begin operations in 2026, and has also announced plans to establish a 1GW data center complex in El Paso, Texas.

Meta, which released its third-quarter earnings the previous day, stated that its capital expenditures this year will reach up to $72 billion, and that the pace of capital expenditure growth will accelerate further in 2026 compared to this year. CEO Mark Zuckerberg said, "I want to make it clear that we are not underinvesting," and added, "Aggressively building out (data center) capacity in advance is the right strategy." Previously, Meta secured $30 billion in funding for data center construction and other purposes through partnerships with private equity fund Blue Owl Capital and Pacific Investment Management.

In the market, there is an assessment that Meta's aggressive capital expenditure plans are creating a short-term investment burden. U.S. financial media outlet CNBC analyzed, "There is growing skepticism about how much profit Meta can actually generate from its bold investments in AI."

The Financial Times (FT) in the United Kingdom pointed out, "A large investment does not guarantee success. At the same time, the possibility of losses increases." It added, "Competitor Google is spending even more on data centers than Meta, but because it has a cloud computing business, it can lease out unused server space to other companies."

On this day, Meta closed at $666.47 on the New York Stock Exchange, down 11.33% from the previous session.

This content was produced with the assistance of AI translation services.