United States: Meta reduces CapEx by about $3bn amid DC construction pause

Global social media firm Meta has reduced its capital expenditure by almost $3 billion this quarter as it takes a break in data center construction. The company now expects its CapEx costs for the year to reach $27-29 billion instead of the original $27-30 billion. 

Meta CFO Susan Li said, “Capital expenditures were below the prior year levels primarily due to lower server and data center construction spend as we prepared to shift to our new data center design, as well as payment timing.”

She continued, “We had to pause some of our existing data center construction work to switch over to the new data center architecture that played through in some of our 2023 CapEx dynamics.”

Despite this reduction, Meta expects its capital expenditures for next year to be about $30-35 billion, with AI being its largest expected area of increased investment over 2024 as it continues to invest in Generative AI. 

“And going forward, as I think we said when we introduced the concept of this architecture, we expect it to be more cost-efficient for us. We expect it will give us greater fungibility in the way that we plan for CPU and GPU capacity. So we expect that we'll be realizing the cost benefits and efficiencies and the planning flexibility that the architecture gives us in the years to come,” Li concluded.