S&P Cuts Meta Outlook as AI Spending Hits Billions

S&P Global just dropped Meta to a negative outlook because of its massive AI spending. The agency expects Meta to burn through twenty-two billion dollars this year alone. That cash burn is projected to hit seventy-one billion dollars by twenty twenty-seven. Meta is leasing data centers instead of using traditional debt to fund this growth. And here is the catch. S&P warns that Meta's leverage could exceed one point zero times by twenty twenty-seven. That crosses the threshold for its current credit rating. Rivals can lease compute capacity to make money back right now. Meta is betting heavily on better advertising tools and new agentic apps like Muse. But S&P says it is unclear when those revenue streams will actually cover their rising costs. Meta disagrees and claims its AI investments are already driving stronger engagement. Meanwhile, capital expenditures are on track to reach two hundred fifty-two billion dollars by twenty twenty-eight.