Companies

Mark Zuckerberg's $65 Billion Bet on AI: Impact on Nvidia and Other Players

Published January 25, 2025

Deepwater Asset Management's Gene Munster believes that Meta Platform Inc. will significantly benefit Nvidia Corp. and other hardware companies with its plans to invest as much as $65 billion this year to enhance its AI infrastructure.

Zuckerberg's Bold Investment Plans

On a recent Friday, Meta CEO Mark Zuckerberg revealed the company's capital spending strategies for the upcoming years, placing a strong emphasis on the development of artificial intelligence (AI). Zuckerberg stated that Meta is set to allocate an estimated $60 billion to $65 billion for capital expenditures, aimed primarily at expanding its AI teams and constructing a massive new data center. He described this new facility as so expansive that it would cover a substantial portion of Manhattan. Moreover, Zuckerberg projected that by 2025, the company plans to bring online a gigawatt of computing power and expects to have over 1.3 million graphics processing units in operation.

Market Expectations and Implications

Munster remarked that this investment plan surpasses Street estimates of $51 billion, indicating strong market confidence. He also conveyed his expectations that by 2025, Meta AI will serve more than one billion users, with the Llama 4 model emerging as the leading AI model. Additionally, Zuckerberg expressed aspirations for the development of an AI engineer capable of contributing more code to the company's research and development efforts.

Short-term and Long-term Benefits

According to Munster, the immediate impact of the increased AI investments will favor Nvidia and other hardware providers. In the long term, this higher level of capital expenditure is likely to hasten the AI revolution, leading to more innovations, reduced operational costs, a surge in the customer base, and ultimately, more investments in AI technologies.

Caution Amidst Optimism

Despite the optimistic forecasts, Munster offered a note of caution, asserting that while he anticipates the market will continue to rise, it is on a trajectory that might culminate in a significant market correction. He stated, “I believe the market is going higher and the run will end in a spectacular bubble burst.”

Recent AI Innovations from Meta

This announcement aligns with Meta's ongoing advancements in AI. In December, the company launched the Llama 3.3 70B model, which boasts superior performance compared to rivals such as Alphabet Inc., OpenAI, and Amazon.com. The new model provides similar capabilities as Meta's most extensive Llama model, Llama 3.1 405B, but at a significantly lower cost.

Past Strategic Moves

Last April, Meta disclosed plans to acquire 350,000 Nvidia H100 GPUs by 2024 to support its AI initiatives. Initially, these GPUs were intended to improve Instagram Reels rather than to position Meta as a leading entity in the AI technology realm.

Market Performance

On the financial front, Meta Platform's stock registered a closing price of $647.49 on the latest trading day, marking a slight decrease of 0.20% for that day.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. It has been prepared with the help of AI tools and reviewed by editors.

Meta, Zuckerberg, Investment