Meta Increases Revenue but AI Spending Surges 68%
Meta posted a significant rise in its quarterly earnings, generating $64.6 billion in revenue during the third quarter of 2026, marking a 26% increase from the previous year. However, the social media giant’s investment in artificial intelligence (AI) soared even higher, with spending jumping by 68% over the same period.
Growth in Users and Advertising Revenue
The company continues to expand its reach, now boasting 3.64 billion daily active users across its platforms, including Facebook, Instagram, and WhatsApp. India has emerged as Meta’s largest market by user count, underscoring the company’s continued focus on international growth. Furthermore, increasing advertisement prices by 14% in the quarter played a crucial role in boosting Meta’s earnings.
Despite these revenue gains, the number of advertisements seen by users grew by 10%, though this growth rate has slowed compared to previous quarters. Threads, Meta’s social media platform, has outpaced X (formerly Twitter) in monthly users, reflecting shifting dynamics in social media preferences. Notably, the Asia Pacific region experienced the most rapid ad view increase at 24% this year.
Mounting AI Investment Amid Cost Increases
While revenue rose substantially, Meta’s overall expenses have climbed sharply due to aggressive spending on AI infrastructure. The corporation has earmarked between $130 billion and $145 billion this year alone for AI data centers and cutting-edge chip acquisitions. Total projected costs for 2026 are expected to fall between $165 billion and $169 billion.
This large-scale investment coincides with workforce reductions; Meta cut its staff by 15% over the past year, downsizing to 66,775 employees, including a notable layoff of approximately 8,000 workers in May 2026. This suggests a strategic pivot towards automating operations with AI technologies to replace human labor.
The Impact on Meta’s Business Model
Unlike competitors such as Google, Amazon, and Microsoft that monetize AI by selling tools to other companies, Meta focuses exclusively on enhancing its own ecosystem through AI-powered features like Facebook advertisements and the Muse chatbot. However, the reception to these AI additions has been mixed. A Morgan Stanley analysis revealed that most participants stop using Muse within two weeks of downloading it.
CEO Mark Zuckerberg has emphasized AI as the company’s “biggest priority,” yet the growing gap between AI expenses and tangible returns underscores the challenges Meta faces in converting large AI investments into sustainable profits.
For Pakistani readers, this development highlights the rapidly evolving tech landscape dominated by AI-driven strategies. Meta’s experience reflects the broader challenge for technology firms globally—striking a balance between expensive AI innovation and user adoption to ensure future growth. As Pakistan’s digital ecosystem expands, understanding these trends is crucial for businesses and consumers alike.
