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<\/p>\nS&P lowered the outlook on Meta\u2019s AA- credit rating to negative from stable, citing heavy AI spending. It expects Meta\u2019s leverage to rise above 1.0x as soon as 2027, from about 0.1x last year. Meta says it disagrees.<\/p>\n
S&P Global Ratings has cut its outlook on Meta\u2019s AA- credit rating to negative from stable, warning that the company\u2019s AI spending may be slow to pay off, Bloomberg reported<\/a>. The agency announced the change on Friday.<\/p>\n \u201cMeta\u2019s ability to monetize its AI investments is more limited than that of its peers,<\/em>\u201d S&P said.<\/p>\n Unlike Amazon, Microsoft and Google, Meta has no cloud business yet that rents out computing power. S&P said it is unclear when the spending will bring in more revenue than it costs. Mark Zuckerberg has admitted Meta bet $200B on AI without knowing it would work.<\/p>\n The agency expects Meta\u2019s leverage, its debt measured against earnings, to rise above 1.0x as soon as next year, from about 0.1x last year. That would breach the limit for its current rating.<\/p>\n Meta posted a free cash outflow of $2.12B in the third quarter, and it has $825B in commitments lined up. Earlier this week, it began a $35B share sale to help pay for the build-out.<\/p>\n \u201cWe respectfully disagree with S&P\u2019s assertion about Meta\u2019s AI monetization capabilities,<\/em>\u201d said Meta spokesperson Kamran Mumtaz.<\/p>\n \u201cWe see significant product and business opportunities ahead of us, supporting our very strong credit profile,<\/em>\u201d he added.<\/p>\n S&P has already downgraded Oracle over its data centre bills, and Big Tech has now committed more than $3T to the build-out. The Nasdaq 100 fell 3.5% this week and briefly entered correction territory after disapp<\/a>ointing tech earnings.<\/p>\n<\/p><\/div>\n If you liked the article, do not forget to share it with your friends. Follow us on\u00a0Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n If you want to read more like this article, you can visit our Technology category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n\n