Illustration: Maura Kearns/Axios
Meta shares rose nearly 9% on Wednesday on reports that the company is selling cloud computing services and access to artificial intelligence models.
Why is this important: The booming AI economy has created an insatiable demand for data processing power, enriching companies like Amazon, Google and Microsoft.
Increase: The owner of Facebook and Instagram is building a business to capitalize on accumulated excess computing power through huge investments in data centers and artificial intelligence infrastructure, Bloomberg reports.
The plan could include selling access to artificial intelligence models, similar to how Amazon Web Services provides access through its Bedrock offering.
“Meta will operate the data centers and chips that run the models, including Muse’s own Spark models, and will charge developers for access to them,” Bloomberg reports.
The company is also considering selling excess raw computing power to third-party customers.
Impact: Neocloud shares fell on Wednesday on concerns that Meta could pose a threat.
Shares of CoreWeave closed down nearly 14% on Wednesday, while shares of Nebius fell 17%.
“It’s entirely debatable whether they will or won’t, but what we do know is that Meta occupies one of the largest data centers in the world,” Bernstein analyst Madison Rezaei wrote in a research note.
Rezaei estimates that the company has already accumulated 20 gigawatts of global capacity and expects to commission another 14 GW in the next few years.
“This scale can easily rival the capabilities of cloud providers,” she added.
Meta declined to comment. in the report, but Mark Zuckerberg himself has already suggested that this is possible.
In May, he told investors that selling computing resources was “definitely on the table,” adding that “almost every week we have different companies coming to us from outside asking us to either support the API service or asking if we have computing power that they could buy from us at some premium to what we bought it for.”
“We haven’t done it yet because we think we need the computing, but obviously if we get to a point where we feel like we’ve gone overboard, then we have an option, and that’s part of what gives us the confidence to invest in building it,” he said.
Result: A positive market reaction may only encourage Zuck to aim for the clouds.
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