META PLATFORMS confirmed plans to create a new class of non-voting capital stock, designed to fund its AI investments while preserving Mark Zuckerberg's voting control. The announcement came during the company's third-quarter earnings call Wednesday.
Chief Financial Officer Susan Li said the non-voting shares will be distributed to all existing shareholders as a stock dividend and can be used for capital raising, employee compensation, and acquisitions. The move allows Meta to maintain its dual-class voting structure—where Zuckerberg controls Class B shares with 10 votes each—while accessing the public equity markets for cash without triggering dilution of founder power.
This structural flexibility matters because Meta's capital appetite for AI infrastructure has become extraordinary. The company is spending at a pace that would have alarmed investors in a traditional governance model. By creating a non-voting class, Meta sidesteps pressure from public shareholders who might demand board representation or voting influence proportional to their stake—a common constraint on heavily founder-controlled companies seeking to raise billions.
Zuckerberg said the company is in a "new phase" with its Muse AI assistant, which he said has achieved "clear product-market fit." Over 10 million people in the U.S. and Canada set up Muse personal agents in just one and a half months, and the product has been the top-ranked app in the App Store nearly daily, according to Zuckerberg. The CEO expects continued strong growth as the company scales.
Meta's third-quarter results provided some justification for the capital-raising push. Revenue climbed 26 percent year over year to $64 billion, beating Wall Street estimates. But operating expenses rose 68 percent, a pace that underscores why the company needs structural options to fund its AI bets without constraining other business units.
Reality Labs, Meta's AR and VR hardware division, remains deeply unprofitable. The company now projects Reality Labs losses of $18 billion to $19 billion for 2025, down from prior guidance but still a multibillion-dollar annual drain. That loss rate, combined with Meta's accelerating AI spend, creates pressure to source capital beyond traditional debt and retained earnings.
The non-voting stock structure is not novel—Ford and Berkshire Hathaway, among others, use it—but it is rare in Big Tech. It reflects Meta's choice to prioritize founder control over the typical path of equity democracy, a trade-off that only works when the founder's bets pay off. Zuckerberg's recent track record on AI and infrastructure investment has convinced the market to tolerate it: Meta shares closed Wednesday at $697.52, up 0.5 percent.
