S&P cuts Meta's credit outlook to negative on AI spending

S&P Global Ratings cut its outlook on Meta Platforms' AA- credit rating to negative on Friday, citing elevated AI spending and rising leverage, signaling a potential downgrade within two years. The rating firm said Meta's ability to monetize AI investments is more limited than peers, with unclear timing for revenue exceeding costs. S&P forecasts capex reaching $140 billion this year and over $225 billion in 2027, with leverage potentially climbing above 1.0 times next year. Meta disputed the assessment, citing strong product opportunities, while executives reaffirmed aggressive spending plans. The company has over $800 billion in future commitments, largely for data centers, and is exploring monetization through subscriptions, advertising, and cloud services.