Mark Zuckerberg's Meta Is in Early Talks to Lease $10 Billion of AI Compute to Anthropic, a Potential New Revenue Stream That Could Justify Its Massive AI Spending

Meta Platforms (NASDAQ: META) has underperformed broader equities over the past year. One of the most important reasons why is that although it has ramped up spending to capitalize on what it perceives as a large opportunity in artificial intelligence (AI), the market doesn't see it that way. Meta's increased spending could lead to lower profits and margins if it doesn't achieve the return on investment it expects, the argument goes. However, Meta Platforms' CEO, Mark Zuckerberg, remains unapologetically bullish on AI. Under his leadership, the company is reportedly working on a deal that could justify the billions it is pouring into the technology.

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Meta's new business venture is slowly taking shape

Several weeks ago, reports surfaced suggesting that Meta Platforms was planning to launch a cloud business. The company is apparently looking to rent out excess AI computing capacity to other corporations. Now, Meta is reportedly in early talks to do exactly that with Anthropic, a leading AI company, although the deal is far from done and could still fall through. Anthropic builds large language models (LLMs) and is the corporation behind Claude, a family of LLMs that are arguably among the best on the market. Meta could sign a two-year, $10 billion deal to rent excess AI capacity to Anthropic.

The social media specialist generated about $200 billion in sales last year; an extra $5 billion per year may not move the needle. However, if Meta does secure this deal, it might only be the first of many. Anthropic isn't a small client, and it has historically relied on Amazon (NASDAQ: AMZN), the industry leader, for its cloud computing needs. Securing a client like this will be a great way for Meta Platforms to enter the cloud market. As analysts project rapid expansion in AI infrastructure spending over the next several years, Meta could sign similar deals with other big names and turn its cloud computing business into a meaningful growth driver.

Is Meta Platforms stock a buy?

Meta Platforms' financial results remain strong. The company has improved its core advertising business thanks to AI. Sophisticated recommendation algorithms have helped increase engagement across its websites and apps, while the company has also made it much easier for advertisers to launch ad campaigns. So far, Zuckerberg's optimism has borne fruit, and while some investors worry the AI tailwind will end, there are strong reasons to believe otherwise.

With more than three billion daily active users, Meta Platforms may only be in the early innings of its efforts to monetize AI. In the future, the company could make money from several initiatives, including subscriptions, AI agents for businesses and customers on WhatsApp, among many other monetization schemes the company could launch. Meta Platforms is still fine-tuning its cloud computing business, but its core operations are already strong, and this new opportunity may be the icing on the cake. That's why Meta Platforms' shares are worth buying on the dip.

Prosper Junior Bakiny has positions in Amazon and Meta Platforms. The Motley Fool has positions in and recommends Amazon and Meta Platforms. The Motley Fool has a disclosure policy.