Meta Platforms Eyes Cloud Business Amid AI Demand
Meta Platforms (NASDAQ: META) is reportedly planning to launch its own cloud business to lease access to AI computing power, potentially marking a significant shift in its role from customer to competitor within the sector. This transition is fueled by a $10 billion compute deal currently being discussed between Meta and Anthropic, spanning two years.
As part of this strategy, Meta is constructing a 5-gigawatt data center in Louisiana and expects to develop tens of gigawatts of AI infrastructure this decade. The company’s compute needs are compounded by its 3.56 billion daily active users across social networks, raising questions about its ability to sell excess compute while heavily relying on external providers, including a recent $27 billion, five-year contract with Nebius (NASDAQ: NBIS).
Amidst this environment, neocloud providers are securing long-term contracts, such as Hut 8’s 15-year lease for 352 megawatts valued at $9.8 billion, showcasing a robust demand for compute services, despite Meta’s evolving role. Meanwhile, Compute seller Iren (NASDAQ: IREN) has diversified its customer base with $2.8 billion in new contracts, reflecting confidence in the continued demand for AI resources.
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