New Meta shares aim to fund AI without diluting founder control

Meta is introducing a new type of stock to help pay for its growing artificial intelligence efforts. The change allows the company to raise money without giving new investors a say in how the business is run. Existing shareholders will receive these new shares automatically through a stock dividend. This move ensures that the current voting structure remains intact for those who already own the company's stock.

The announcement came during Meta's third-quarter earnings call on Wednesday. Chief Financial Officer Susan Li confirmed that the company plans to create this new class of non-voting capital stock. Li explained that the new shares are designed for capital raising, employee compensation, and acquisitions. This strategy preserves the voting power of existing Class A and B shareholders. It allows Meta to keep its founder-led structure while expanding its funding tools.

Meta reported strong financial results for the quarter. The company generated $64 billion in revenue, a 26% increase from the same period last year. However, costs and expenses rose sharply as well, jumping 68% year-over-year. Reality Labs, the division behind Meta's virtual and augmented reality hardware, continues to lose money. The company expects those losses to shrink from 2025 levels to a range between $18 billion and $19 billion.

The company has been aggressive in releasing new AI products over the past year. Earlier this year, it launched models named Muse Spark and Muse Glimmer. In recent weeks, Meta added Muse Wonder and Muse Spark Open. The latter is an open-weight model that allows outsiders to access its underlying parameters. Meta also introduced Muse Code, a coding agent for software developers. At its recent Connect event, the company unveiled new avatars for its AI assistant to make the service more relatable and shareable.

Early adoption of these tools appears to be strong. CEO Mark Zuckerberg noted that more than 10 million people in the U.S. and Canada set up personal agents in just six weeks. He stated that the product has maintained the number one spot in the App Store nearly every day. Zuckerberg said the company is now entering a phase focused on scaling the service. He expects the product to eventually serve billions of people as its appeal grows.

Despite the positive momentum, some challenges remain. Li mentioned that the company continues to monitor active legal and regulatory matters. These issues could significantly impact business and financial results. Specifically, the company faces scrutiny on youth-related issues in several markets. A number of trials concerning these matters are scheduled to take place in the United States in the coming months.