Meta’s AI spending is squeezing cash flow despite ad growth

Meta’s latest earnings show the tradeoff behind its AI push: the ad business is still growing fast, but the infrastructure bill is now large enough to reshape the company’s cash profile.

In its official filing, Meta reported $60.80 billion in revenue, up 28%, while costs and expenses rose 55%. Capital expenditures, including finance leases, reached $31.08 billion. Free cash flow fell to $784 million, a sharp compression for a company that is still generating tens of billions in operating cash.

Mark Zuckerberg framed AI as both a current driver for Meta’s core business and a path into new enterprise opportunities. That matters because Meta is trying to justify an infrastructure buildout without the same mature cloud revenue engine that Microsoft, Google, and Amazon can point to.

For a general AI reader, the signal is simple: the biggest consumer AI companies are moving from model demos to balance-sheet tests. Meta can keep spending because ads are strong, but the market now wants proof that AI compute becomes a business, not just a cost center.