Meta CFO Susan Li admits: Salaries adding big to the expense; says: Employee compensation costs, particularly …
Facebook-parent Meta in its third-quarter earnings call revealed a sharp rise in the opening on artificial intelligence, with employee compensation emerging as one of the biggest cost driver for the company, as per chief financial officer Susan Li. This revelation from the company comes at a time when investor concerns are growing over Meta’s ballooning capital expenditures and uncertain timelines for returns. As reported by Business Insider, Meta is now expected to spend $70–72 billion on AI infrastructure in 2025, which is slightly higher from its proviso forecast of $66–72 billion. The report further adds that this figure is said to climb higher in 2026 as the company is working on expanding its data centres, cloud services and staffing for Meta Superintelligence Labs, a new division focused on developing AI models that could eventually surpass human capabilities.“Employee compensation costs will be the second largest contributor to growth,” Li said, “as we recognize a full year of compensation for employees hired throughout 2025, particularly AI talent, and add technical talent in priority areas.”
Meta CEO Mark Zuckerberg defends AI spending strategy
Meta CEO Mark Zuckerberg has fielded pointed questions from analysts at JPMorgan, Goldman Sachs, Bernstein, and Bank of America about the scale and payoff of Meta’s AI investments. Defending his strategy Zuckerberg empathises that the investment is important for staying competitive in the AI race. “In the very worst case, we’ve pre-built for a couple of years,” Zuckerberg said, adding that it’s better to absorb depreciation costs now than be caught short on compute capacity when the next wave of AI breakthroughs arrives.Zuckerberg aslo stressed on the fact that Meta’s AI tools have already crossed the mark of over a billion monthly users across its apps and that smarter models are improving ad targeting and content recommendations—core revenue drivers for the company.Despite beating revenue expectations with $51.2 billion in Q3, Meta’s net profit fell sharply to $2.7 billion, largely due to a $15.9 billion one-time tax charge under the One Big Beautiful Bill Act. The company’s stock plunged nearly 9% in after-hours trading as investors weighed the cost of Meta’s AI ambitions against its near-term profitability.
What’s next for Meta AI
During the call, Zuckerberg revealed that the next wave of innovation will come from Meta’s Superintelligence Labs which is working on creating “truly frontier models” to power AI assistants, content-creation tools, and business products. He argued that each leap in AI capability will feed directly into Meta’s apps and ad business.“Being the best in a given area will drive great returns,” he said. “This is not like a check-the-box exercise.”
