Meta shares jump 8% on new cloud business for excess AI compute

Meta shares jumped 8% on Wednesday after the company confirmed plans to build a cloud business selling excess computing power to outside customers.

Meta launches cloud business to monetize AI infrastructure. The social media giant will sell its surplus computing capacity, CNBC confirmed. Bloomberg first reported the development on the same day.

Meta is weighing whether to provide access to its hosted AI models or simply sell raw computing power. A company representative did not immediately respond to a request for comment.

Investors welcome move amid heavy AI spending. The new business offers a path to generate revenue from capacity the company is not using internally. Some investors had grown uneasy about Meta's infrastructure spending plans.

Meta told investors in April that it plans to spend as much as $145 billion on capex this year. The outlays support continued development of data centers and acquisition of graphics processing units for training AI models and running large workloads.

Cloud market entry follows industry trend. Model developers including Meta have raced to secure computing power since OpenAI launched ChatGPT in 2022. Demand has far outpaced supply ever since.

By entering the cloud market, Meta joins a competitive field dominated by Amazon, Microsoft, Google and CoreWeave. The company is following the lead of Elon Musk's SpaceX, which began selling excess computing capacity this year.

Meta continues AI push after mixed results. The company has struggled to find its footing in the AI industry. It spent $14 billion last year to bring in Alexandr Wang from Scale AI.

Under Wang's leadership, Meta debuted its first model, Muse Spark, in April. The company positioned it as a "powerful foundation" rather than a state-of-the-art offering.