Meta launches $35B stock offering, part of a $95B AI funding plan

Meta Platforms launched a stock offering on October 26 that it says will raise about $35 billion, the first step in a plan that SiliconANGLE reports could reach $95 billion. The filings Meta made with the SEC show two offerings priced together, a mandatory convertible preferred stock and common stock sold through forward sale agreements. It is a large new way for a big tech company to pay for AI data centers.

The sale matters because Meta is one of the few companies that has funded its AI buildout mostly from its own cash flow. Selling this much stock to pay for compute is a change in how the biggest spenders finance the race.

What Meta is selling

According to Meta's free writing prospectus, the launch has two parts that close independently:

• Depositary shares of Series A mandatory convertible preferred stock. Meta is offering 250 million shares at $50 each, about $12.5 billion. Each represents a 1/20th interest in a preferred share. Meta plans to list them on Nasdaq under the ticker METAM. The dividend rate was not set in the preliminary document. The preferred converts into common stock on or about August 15, 2029, and underwriters have a 30-day option for 37.5 million more.
• $22.5 billion of Class A common stock. The stock is sold through forward sale agreements with Morgan Stanley and Goldman Sachs. In a forward sale, the banks borrow and sell shares now, and Meta gets paid when it settles later, on or before November 19, 2027. Meta does not receive initial proceeds. Underwriters have an option for $3.375 billion more.

The filing says Nvidia, AMD and Broadcom have indicated non-binding interest in buying up to $5 billion of the common stock in total.

The $60 billion that comes later

Meta also says it expects an at-the-market program of about $60 billion in Class C common stock, which lets a company sell shares gradually at market prices. It is not expected to start until the first quarter of 2027, after Class C stock begins trading, and the filing says no agreement has been signed yet. The $95 billion figure is the sum of the $35 billion launch and this later program.

What the money is for

SiliconANGLE reports that the proceeds will help finance data center projects, including four AI superclusters of more than one gigawatt each and the Hyperion campus in Louisiana. The legal documents are less specific. The preliminary prospectus supplement says the net proceeds of the preferred offering are for general corporate purposes.

What we don't know yet

The dividend rate, the conversion terms and the final pricing were still blank in the documents we read. The prospectus also describes mechanics that could add shares later, such as share-based dividend payments and a conversion rate that depends on the stock price. Final terms will come with pricing.