Move could upend Amazon, Microsoft and Google's dominance; Meta shares surge 10%

The Meta logo. [Reuters]
The Meta logo. [Reuters]

Meta, which has built a massive computing infrastructure to develop artificial superintelligence (ASI), is now pursuing the sale of its surplus capacity to outside customers. The move is expected to upend a cloud market long dominated by three players: Amazon Web Services (AWS), Microsoft Azure and Google Cloud.

Meta has internally launched a plan called "Meta Compute" and is drawing up a cloud business model that would leverage its data center infrastructure, Bloomberg reported Tuesday, citing multiple sources.

Sources said Meta is pursuing its cloud strategy along two broad tracks. The first would place Meta's own latest AI model, "Muse Spark," on Meta's infrastructure and allow outside developers to access it via application programming interface (API) — a platform-as-a-service (PaaS) model similar to AWS's Bedrock, Microsoft Azure's AI Foundry and Google Cloud's Vertex AI.

The more closely watched approach involves leasing raw computing capacity wholesale to outside parties — essentially renting out the data center's core resource itself. That model resembles the infrastructure-as-a-service (IaaS) approach favored by so-called "neo-cloud" companies such as CoreWeave and Nebius.

The project is being led by Santosh Janardhan, Meta's head of infrastructure, along with Daniel Gross of the Meta Superintelligence Lab (MSL) and Meta President Dina Powell McCormick.

The move is widely seen as an effort to counter growing investor concerns about excessive AI spending.

Meta has aggressively built out its data center infrastructure under the banner of ASI development, stockpiling AI chips including costly Nvidia graphics processing units (GPUs). The company projects its capital expenditure this year — the bulk of which goes toward AI infrastructure — will reach $145 billion.

CEO Mark Zuckerberg, who has argued since last year that underinvestment is more dangerous than overinvestment, signaled the possibility of entering the cloud business at the shareholder meeting in May, saying, "If we determine that we've overbuilt infrastructure, we can sell the surplus capacity externally to reduce risk."

The strategic pivot echoes a recent move by Elon Musk's AI company xAI. xAI, a subsidiary of SpaceX, recently signed long-term IaaS leases with Anthropic and Google for computing capacity at Colossus, its massive data center in Memphis, Tennessee.

xAI is estimated to have spent about $30 billion building the data center. Industry observers note that annual revenue from leasing the facility is approaching $30 billion, meaning the company could recoup its entire investment within a year.

News of Meta's potential entry into the cloud market sent its shares up roughly 10 percent, with the stock trading around $619 as of 1:20 p.m. Eastern time Tuesday. CoreWeave and Nebius — which now face Meta as a potential competitor — tumbled 12 to 14 percent from their previous closing prices over the same period.


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