Meta builds cloud business to sell spare AI computing capacity, shares jump 10%
Meta is developing a cloud unit to sell excess AI computing capacity, Bloomberg reported, putting it in direct competition with AWS, Microsoft Azure and Google Cloud. Shares climbed as much as 10%, their best intraday gain since January.
A new cloud competitor
Meta Platforms is building a cloud business to sell spare AI computing power to external customers, according to a Bloomberg report citing people familiar with the matter. The move would place the Facebook parent in direct competition with the three dominant cloud providers: Amazon Web Services, Microsoft Azure and Google Cloud. Shares jumped roughly 10% on Wednesday, the stock's best day since January, after a year in which Meta had been trading down about 15% as investors questioned the scale of its AI infrastructure spending.
It's definitely on the table. We haven't done that yet, because we think that we have a use for the compute. But obviously, if we get to a point where we feel that we have overbuilt, then that is an option that we have, and that is partially what gives us confidence in investing in building this out.
Two tracks under consideration
The nascent cloud unit, reportedly housed under a new internal initiative called Meta Compute, is weighing two main models. The first would sell access to AI models hosted on Meta's own infrastructure, similar to how Amazon Web Services' Bedrock platform lets customers tap a range of models. The second would lease raw computing capacity, the approach taken by so-called neocloud providers like CoreWeave. Meta Compute was created in January and is led by infrastructure chief Santosh Janardhan, Daniel Gross of Meta Superintelligence Labs and Meta president Dina Powell McCormick.
Spending and the investment logic
Meta has guided to capital expenditures of $115 billion to $135 billion for 2026, a massive outlay on chips, land and power to support its AI ambitions. Some reports place the spending range higher, at $125 billion to $145 billion. The company has started building a $10 billion data centre in Mississippi and is designing its own chips with Broadcom. A cloud business would convert idle GPU clusters into recurring, high-margin revenue, improving the return on infrastructure the company was already planning to build. The market treated the news as a small but meaningful signal that those billions could eventually pay back.
- Meta Compute, an internal data centre and AI infrastructure initiative, is created.
- At Meta's annual shareholder meeting, CEO Mark Zuckerberg says entering cloud computing is 'definitely on the table' if the company overbuilds capacity.
- Bloomberg reports Meta is building a cloud business to sell excess AI computing power; shares rise as much as 10%.
Following SpaceX into the surplus market
Meta would not be the first to spot the opportunity. SpaceX has been renting spare capacity from xAI's Memphis data centre to Anthropic, an arrangement that Bloomberg Intelligence estimates could bring in more than $50 billion by 2028 and $100 billion by 2030. The broader industry trend is to build far more compute than is needed today on the assumption that demand will catch up, then lease the idle capacity in the meantime. Meta's entry would add one more heavyweight to that race.
Broader AI pivot
Beyond the cloud play, Meta is pushing its AI models into consumer products. Its Muse Spark AI model is already free across Facebook, WhatsApp, Instagram and the standalone Meta AI app, with subscription tiers unlocking more advanced reasoning and higher generation limits. The company plans to integrate a new AI model into its recently announced Meta Glasses and, like Google, is working on AI agents that can handle personal and professional tasks on a user's behalf.
