(July 1): Meta Platforms Inc is developing plans for a cloud infrastructure business that will sell access to AI computing power and models, setting up a new vector of competition with industry leaders like Amazon Web Services, Microsoft Azure and Google Cloud.
Meta, which has been rushing to secure expensive data centres and other infrastructure to fuel its own artificial intelligence ambitions, is forming a business to generate revenue from excess computing power sold to outside customers, according to people familiar with the matter, who asked not to be named as the details aren’t public.
One potential plan includes selling access to various AI models that are hosted on Meta’s existing AI infrastructure, an approach similar to AWS’ Bedrock offering, the people said. Meta would run the data centres and chips that power the models, including its own Muse Spark models, and charge developers to access them.
The company is also considering selling access to “raw” computing capacity, akin to other so-called neocloud businesses like CoreWeave Inc, the people said. Development of these new business lines is part of Meta Compute, an internal initiative to build and manage the company’s AI infrastructure efforts, according to a person familiar with the plans. Meta Compute is led by Santosh Janardhan, Meta’s head of infrastructure; Daniel Gross, a leader inside the Meta Superintelligence Labs AI unit; and Meta president Dina Powell McCormick.
Shares of Meta jumped as much as 8.6% in pre-market trading on Wednesday before paring some of their gains. A Meta spokesperson declined to comment. The company’s plans are still in development, and it’s possible the strategy could change.
Meta has made developing AI “superintelligence” a top priority, and has committed hundreds of billions of dollars to data centres and other AI infrastructure, like expensive chips that it deems necessary to make that happen. That investment, which has left investors anxious about Meta’s plans to earn a return on that spending, includes major computing deals with CoreWeave, Alphabet Inc’s Google and Oracle Corp, among others.
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A cloud business offers one way to return some of that investment. AWS, Azure and Google Cloud have spent decades building platforms that rent access to computing power, storage and software over the internet — businesses that now command tens of billions of dollars per quarter in revenue.
As demand for AI has surged, those providers have also expanded to rent the specialised chips and computing capacity needed to train and run AI models. It is a complex business, requiring not only vast fleets of data centers but also software platforms, enterprise sales teams and customer support operations.
Elon Musk’s SpaceX, which acquired his AI start-up xAI in February, recently emerged as a key player in this space, renting access to its massive data centre in Memphis to Anthropic PBC earlier this year and striking a deal with Google. That strategy could help xAI generate more than US$50 billion ($64.8 billion) in revenue by 2028 and US$100 billion by 2030, according to an estimate by Bloomberg Intelligence.
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Despite the complexities, Meta chief executive officer Mark Zuckerberg has signalled to investors that he’s open to selling excess computing infrastructure, or even a so-called API service where customers would pay for AI usage — a business that’s usually measured in “tokens,” or the amount of data used and generated for a customer query.
“It’s definitely on the table,” Zuckerberg said during a call with shareholders in May. “Almost every week there are different companies that come to us from the outside asking us to both stand up an API service or asking if we have compute that they could buy from us at some premium to what we’ve bought it at.”
“We haven’t done that yet because we think we have a use for the compute,” Zuckerberg said at the time. “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.”
Amid a fast-moving AI race, Zuckerberg has repeatedly suggested that he believes the industry is constrained when it comes to computing capacity and that Meta should amass as much as possible and determine its use later.
Uploaded by Magessan Varatharaja
