Meta shares jumped as much as 10% on Wednesday after a report said the company is preparing to launch a cloud business that would sell excess AI computing capacity built through its massive investment in data centers.
According to the report, Meta plans to rent out spare computing power to businesses and developers, potentially giving customers access to its AI infrastructure and some of its AI models.
If launched, the service would put the Facebook and Instagram parent in direct competition with cloud computing giants such as Microsoft, Amazon, Alphabet, and AI infrastructure provider CoreWeave.
The news was welcomed by investors, who see the move as a way for Meta to generate new revenue from the billions of dollars it has poured into AI infrastructure. The company is one of the largest AI spenders in the world and recently raised its capital expenditure forecast to between $125 billion and $145 billion this year as it expands data centers and AI capabilities.
Despite Wednesday's rally, Meta shares remain about 8% lower year to date. Investors have grown increasingly cautious over the enormous cost of the AI race and whether companies will be able to earn enough revenue to justify their spending.
A cloud computing business could help Meta monetize its excess AI capacity while reducing concerns about the long-term return on its AI investments.