Meta Plans AI Cloud Services to Challenge Amazon, Microsoft, and Google

Meta is preparing to enter the cloud computing market by offering external customers access to AI-powered computing resources and AI models, directly competing with tech giants Amazon, Microsoft, and Google, according to a Bloomberg report. One of the considered plans involves selling access to various AI models hosted on Meta’s existing infrastructure, similar to Amazon’s Bedrock service. Meta will operate the data centers and chips behind these models, including its own Muse Spark models, and charge developers for access. Additionally, the company is exploring selling access to raw computing power, akin to services offered by companies like CoreWeave.

This new initiative is organized under an internal unit called Meta Compute, led by Santosh Janardhan, head of Meta’s infrastructure, Daniel Gross from Meta Superintelligence Labs, and Meta president Dina Powell McCormick. Meta emphasized that these plans are still in development and subject to change, declining further comment.

The announcement caused a sharp surge in Meta’s stock price, which jumped about 10% on Wall Street, the largest daily gain since April. Conversely, shares of CoreWeave fell up to 14%, and Dutch data center company Nebius Group dropped as much as 17%.

Meta’s move follows massive investments in data centers and AI infrastructure over recent years, totaling hundreds of billions of dollars and involving major computing deals with CoreWeave, Google, and Oracle. These heavy expenditures have raised investor concerns about Meta’s ability to recoup its investments. Entering the cloud business offers a potential revenue stream to offset these costs.

CEO Mark Zuckerberg hinted at this strategy during a May shareholder call, stating, "It’s definitely on the table," noting frequent inquiries from external companies about API services and purchasing computing power. He added that Meta has not yet pursued this path because it currently needs the computing power internally but would consider it if it builds excess capacity.

If Meta successfully enters the cloud market, dominated by AWS, Microsoft Azure, and Google Cloud, each generating tens of billions of dollars quarterly, it would mark a significant strategic shift. For comparison, Elon Musk’s SpaceX, which acquired xAI in February, has become a key player by leasing access to its Memphis data center to Anthropic and Google.