Nvidia Puts $3 Billion Into Meta as the Facebook Parent Lifts Its Stock Sale to $97.5 Billion

SANTA CLARA, Calif. - Nvidia is buying a piece of one of its biggest customers. The chipmaker said early Tuesday that it will invest $3 billion in Meta’s equity offering, a day after Meta launched a plan to raise as much as $95 billion by selling stock. By Tuesday morning, Meta had raised the target to $97.5 billion, the largest equity fundraising in its history, Reuters reported.

Screenshot: @nvidianewsroom on X

The investment comes wrapped in a product deal. In a joint announcement, the two companies said they will expand their work on Muse, Meta’s personal AI agent, and the Muse family of models, with the goal of improving inference and training performance and lowering total cost of ownership. Meta intends to deploy more Nvidia Vera Rubin systems and Vera CPUs, along with Spectrum-X Ethernet networking and BlueField-4. The companies will also consider working together on Nvidia’s OpenShell reference architecture, including OpenShell for deploying agents safely and a tool called Sentry for monitoring how agents behave.

“AI agents represent a new computing paradigm,” Nvidia chief executive Jensen Huang said in the statement, describing them as “software that understands our goals, reasons, uses tools and gets work done on our behalf.” Meta chief executive Mark Zuckerberg said: “Muse is how we bring personal superintelligence to everyone. We’re excited to keep working with NVIDIA to deliver the best personal agents and frontier models for billions of people.”

Image: NVIDIA

The numbers moved overnight. Meta said it increased the common stock portion of its offering from $22.5 billion to $25 billion, priced at $625 a share, and priced 250 million depositary shares, tied to a new mandatory convertible preferred stock, at $50 each, according to Reuters. That brings the underwritten offerings to about $37.5 billion. A separate at-the-market program of up to $60 billion will follow once Meta’s new nonvoting Class C shares begin trading, expected in the first quarter of 2027. Nvidia, Advanced Micro Devices and Broadcom had signaled interest in buying up to $5 billion of the Class A shares combined.

Meta needs the money. It reported $2.12 billion of negative free cash flow in the third quarter, its first in more than a decade, and last week raised the low end of its capital spending forecast to a range of $135 billion to $145 billion, Reuters said. Muse, which launched last month, is central to that spending. Reuters described it as an agent that can reach a user’s email, calendar, payments, health, shopping and smart home apps, with access the user can revoke at any time.

Screenshot: @CNBC on X

The deal also sharpens a question investors keep asking about the AI boom: how much of the money is going around in a circle. Suppliers financing a top customer that then spends heavily on their chips “adds to concerns about an increasingly circular flow of capital,” Reuters wrote. “We expect investors to continue to question the financing and potential for future capital raises,” William Blair analysts said in a note, while adding that the raise “reinforces both Meta’s confidence in the long-term returns from AI investment and the increasingly capital-intensive nature of pursuing that opportunity.” Nvidia has taken part in 121 investment rounds so far this year, up from 13 in 2022, CNBC reported, citing Dealroom, with stakes that include OpenAI, Anthropic, Intel and xAI. Meta is now on that list.