When Meta released its quarterly earnings report on Wednesday evening, a colleague pointed out how the social media giant lost $4 billion on Reality Labs, the division responsible for AR glasses and VR headsets. It’s a given. Reality Labs has lost another $4 billion, and also, the sky is blue.

Equally astounding is that as Meta pulls back from its metaverse ambitions, its spending on AI will be even more astronomical. True, it’s not like Meta doesn’t have the money. In the first quarter of this year, the social media giant posted a net income of $26.8 billion, up 61% over the year prior; revenue also increased 33% year-over-year to $56.3 billion.

But despite its foundation in social media, Meta’s current goal is to stay competitive with AI leaders like OpenAI and Anthropic. Meta projected that it will spend between $125 billion and $145 billion in 2026, exceeding analysts’ projections and Meta's previous estimates.

“We are increasing our infrastructure capex forecast for this year,” said CEO Mark Zuckerberg on a public call with investors on Wednesday. “Most of that is due to higher component costs, particularly memory pricing […] We are very focused on increasing the efficiency of our investments.”

So, despite its impressive quarterly results, Meta’s investors aren’t thrilled. The stock was down more than 5% in after-hours trading.