Inside Meta's AI Meltdown: How Zuckerberg Lost $29B Overnight — and What Went Wrong

Core Insights - Meta's stock experienced a significant decline, leading to a $29 billion drop in Mark Zuckerberg's wealth, marking one of the largest single-day losses in history [1][7] - The decline was triggered by Meta's announcement of record spending on artificial intelligence, raising concerns among investors about the sustainability of such investments [2][4] Financial Performance - Meta projected capital expenditures of $70 billion to $72 billion for 2025, the highest forecast in its history, primarily for AI infrastructure [3] - Despite reporting quarterly earnings that exceeded expectations with revenue of approximately $51.4 billion and earnings of $2.71 billion, investor concerns about rising AI costs overshadowed these results [5][6] Market Reaction - The company's stock fell by over 11%, resulting in a loss of tens of billions in market value and a drop in Zuckerberg's ranking on the Bloomberg Billionaires Index from third to fifth [2][7] - The sell-off reflects broader market apprehension regarding the viability of massive AI investments in the tech sector [8][9] Strategic Direction - Meta's long-term strategy focuses on integrating advanced AI technologies across its platforms, marking a significant shift from its previous metaverse ambitions [10][11] - The company plans to continue hiring top AI engineers and expanding its data center network, forecasting higher expenses for 2026 [10][11] Industry Context - The reaction to Meta's spending highlights a growing caution in the tech industry regarding the pace of AI investment relative to real-world demand [8][9] - Analysts are closely monitoring Meta's next quarterly report to assess whether investor confidence will recover or if the recent downturn indicates deeper issues [12]