NVIDIA announced on October 27th that it will invest $3 billion in the latest round of equity financing for Meta Platforms, while also expanding cooperation in the field of artificial intelligence infrastructure. The focus is on enhancing the training and inference performance of the AI models within the Muse series under Meta. Meta plans to further deploy NVIDIA Vera Rubin computing platforms, Vera CPU, and networking technologies in data centers to support the expansion of AI's intelligent entity business. At the same time, Meta has increased the scale of this common stock issuance from $22.5 billion to $25 billion, and with the addition of a $12.5 billion issuance of preferred stock depositary receipts, the total financing scale has risen to $37.5 billion. This transaction means that while NVIDIA will continue to supply AI computing devices to Meta, it will also become an equity investor in the company.

I. NVIDIA subscribes for $3 billion in Meta shares, expanding financing by $2.5 billion

According to a statement released by both companies on October 27th, NVIDIA will invest $3 billion to participate in the ongoing public equity financing of Meta.

Meta also announced that it would increase the issuance scale of Class A common shares from the original $22.5 billion to $25 billion, an increase of about 11.1%. Together with the approximately $12.5 billion in mandatory convertible preferred stock depositary receipts previously planned to be issued, the total financing scale has increased from $35 billion to $37.5 billion.

Meta has determined that the issue price for common shares will be $625 per share, and the issue price for preferred stock depositary receipts will be $50 per unit. Based on the issue price of common shares, NVIDIA's investment of $3 billion corresponds to approximately 4.8 million Meta common shares, which represents 12% of the total issuance volume of common shares this time.

This financing is mainly used for the infrastructure construction of AI that Meta is currently advancing. The company previously estimated that its capital expenditures would reach $135 billion to $145 billion in 2026, and the continuous expansion of data centers and computing power investment necessitates further fundraising from external capital markets.

In addition, Meta also announced on Monday that it plans to raise approximately $60 billion through a market-based issuance of Class C shares without voting rights in 2027. If both the current financing of $37.5 billion and next year's $60 billion plan are fully implemented, the total base size of the two financings will reach $97.5 billion. However, no formal agreement has yet been signed for next year's issuance plan.

II. Both parties will expand cooperation on the Muse model, and Meta will deploy Vera Rubin and Vera CPU.

In addition to equity investment, NVIDIA and Meta also announced an expansion of their technical cooperation, focusing on the AI models of the Muse series from Meta, with the aim of improving model training and inference efficiency.

According to the joint statement, Meta plans to further expand the deployment of NVIDIA's computing infrastructure in its data centers, including the adoption of a new generation of Vera Rubin computing platforms and Vera CPU, to provide computational support for Muse AI intelligents. At the same time, Meta will also deploy NVIDIA's networking technology to optimize data transmission and computing resource scheduling within the data centers.

The focus of the cooperation between the two parties is to optimize the computing infrastructure required for the AI intelligent entity end-to-end. Compared to traditional chatbots, the AI intelligent entity needs to perform more consecutive tasks, involving model inference, tool invocation, and multi-step operations, which places higher demands on computing efficiency, network performance, and system stability.

NVIDIA CEO Jensen Huang stated in a declaration that the two parties are expanding their collaboration to comprehensively optimize the computing infrastructure required for the AI intelligent entity, thereby enhancing the system's capabilities, efficiency, and security.

This collaboration is also related to the recent market performance of Muse products by Meta. Reports indicate that the Muse intelligent entity launched by Meta has received positive feedback from users, and within a week of its launch, it became one of the most downloaded applications. As the user base expands, Meta needs to further increase its reasoning computing power to meet the operational requirements of the AI intelligent entity.

III. NVIDIA shifts from chip supplier to equity investor, Meta accelerates AI infrastructure financing

The most notable change in this transaction is that NVIDIA's relationship with Meta has further expanded from traditional chip procurement cooperation to equity investment and joint development of infrastructure.

For NVIDIA, Meta is a major customer for the procurement of large AI computing devices. By participating in the Meta equity financing, NVIDIA will further strengthen its cooperative relationship with this important customer, and the Meta expansion of Vera Rubin and related network device deployments may also bring more long-term business opportunities to NVIDIA.

For Meta, NVIDIA's $3 billion investment not only provides financial support for the expansion of its AI, but also complements the subsequent deployment of computing platforms. As the scale of applications using Muse intelligent agents grows, the company will need to continuously enhance its model training and inference capabilities, and related infrastructure expenditures will remain at a high level.

However, expanding equity financing also means that the existing shareholders of Meta will face further dilution. Although the company plans to use Class C shares without voting rights to provide more room for future financing in order to maintain the current voting rights structure, the additional shares may still dilute the economic interests of ordinary shareholders.

In terms of stock prices, on October 26th, NVIDIA rose by 2.39% to close at $216; Meta fell by 1.88%.

This collaboration has enabled Meta to obtain new capital support and has clarified some of the core technologies to be used for the infrastructure expansion in the next phase of AI. For investors, the focus will be on whether Meta can achieve returns that match the continuously increasing capital investment through the commercialization growth of Muse intelligent entities and other AI products.