Meta Platforms saw its stock surge roughly 9% following reports that the company is entering the cloud computing business. According to Bloomberg News, the move involves selling excess artificial intelligence compute capacity to other companies. The stock jump signals investor enthusiasm for a new revenue stream.
The reported shift echoes a strategy employed by Elon Musk's xAI, which also rents out computing power. For Meta, it represents a way to monetize massive infrastructure investments made for its own AI models. CoreWeave, a cloud competitor focused on AI workloads, saw its shares drop on the news.
Details remain sparse, but the business would leverage Meta's existing data centers and GPU clusters. The company has been spending heavily on AI infrastructure, and this initiative could help offset those costs. No specific pricing or timeline has been disclosed by Meta.
The move could reshape the competitive landscape for AI cloud services, pitting Meta against established players like Amazon Web Services and Microsoft Azure. For investors, it offers a tangible monetization path beyond advertising revenue. However, Meta's AI model performance has reportedly lagged, raising questions about its long-term strategy.
Some analysts caution that building a cloud business requires different operational expertise than social media, and success is far from guaranteed. Meta has not officially confirmed the report.