Meta's AI spending cut its free cash flow 91% to $784 million in the second quarter, sending shares down about 9% in premarket trade, as reported by Reuters on July 30, 2026. Chief Executive Mark Zuckerberg signalled that Meta can simultaneously advance its own AI ambitions while renting out computing capacity to boost returns, but investors are not convinced. Zuckerberg described computing capacity as a scarce strategic asset to retain and expand, though he acknowledged Meta had received offers from businesses willing to pay "a meaningful premium" to use its capacity for their own AI projects. The tension highlights Meta's challenge in diversifying revenue beyond digital advertising, as it competes with Microsoft, Alphabet, and Amazon, which have established enterprise cloud businesses. Microsoft demonstrated that model's strength on Wednesday, exceeding expectations for Azure cloud growth and Copilot adoption despite a 23% drop in free cash flow, sending its shares up about 8%. Zuckerberg said Meta expects higher margins from "selling intelligence rather than selling compute directly," but provided few details on how AI-powered personal assistants and business agents would generate sufficient returns. He added that Meta is investing ahead of demand because data centres require years to build before becoming operational.