In the high-stakes world of Big Tech, Meta Platforms Inc. is doubling down on artificial intelligence, pouring billions into infrastructure and research despite growing investor concerns about profitability. As the company ramps up its capital expenditures to unprecedented levels, Chief Marketing Officer Alex Schultz has emerged as a vocal defender of this aggressive strategy, arguing that AI is not just a cost center but a transformative force driving Meta’s core business.

According to a recent interview, Schultz highlighted how AI has enabled Meta to shift its content recommendation algorithms from ‘connected’ feeds—based on users’ social graphs—to ‘unconnected’ ones that prioritize engaging content regardless of source. This pivot, he claims, has supercharged user engagement across platforms like Facebook and Instagram. ‘AI is allowing us to show people content that they love, even if it’s not from their immediate network,’ Schultz told Business Insider.

The Pivot to Unconnected Content

This algorithmic evolution marks a significant departure from Meta’s traditional social networking model. By leveraging AI to curate personalized feeds, Meta has reported increased time spent on its apps, which in turn boosts advertising revenue—the lifeblood of the company. Analysts note that this AI-driven approach has helped Meta weather competitive pressures from rivals like TikTok, where discovery-based content reigns supreme.

Schultz’s defense comes at a critical time. Meta’s latest earnings revealed plans to spend up to $72 billion on AI infrastructure in 2025, a figure that has raised eyebrows on Wall Street. As reported by The New York Times, this includes massive investments in data centers, servers, and hiring AI researchers, with spending projected to continue into 2026.

Escalating Capex in the AI Arms Race

The spending boom is part of a broader industry trend, where tech giants like Google, Microsoft, and Amazon are collectively funneling hundreds of billions into AI. A CNBC analysis estimates that these companies will invest over $400 billion in 2025 alone, rivaling the defense budgets of entire nations. Meta’s portion, Schultz argues, is justified by tangible returns, such as improved ad targeting and content moderation.

Critics, however, warn of an AI bubble. Posts on X (formerly Twitter) from industry observers like Stephanie Link highlight the scale: ‘US cos AI capex spend is alive and well: collectively $GOOG $MSFT $AMZN $META will spend $400B in 2025 – close to what the entire EU will spend on defense at $410B.’ This sentiment underscores fears that overhyped AI investments could lead to diminishing returns if monetization lags.

Investor Reactions and Market Dynamics

Despite the skepticism, Meta’s stock has shown resilience. A Morningstar report praises the strategy, with one analyst calling Meta their ‘best idea’ due to AI-fueled growth potential. The company reported 26% year-over-year revenue growth in its recent quarter, attributed in part to AI enhancements in advertising tools.

Schultz emphasized in the Business Insider interview that AI isn’t just about future bets like the metaverse but immediate value creation. ‘We’re seeing real ROI from AI in our core products,’ he said, pointing to features like AI-generated ad creatives that have streamlined marketing for small businesses. This aligns with broader industry data from WIRED, which notes record profits amid surging infrastructure spends.

Broader Economic Implications

The AI spending frenzy is propping up the U.S. economy, according to The Washington Post. Investments in data centers and compute power are creating jobs and stimulating sectors like energy and construction. Meta alone plans to invest $600 billion in U.S. infrastructure by 2028, as per reports from Inkl, supporting local economies while advancing its AI ambitions.

Yet, financing these expenditures raises questions. An Investing.com analysis suggests tech firms may need to borrow more as capex approaches 94% of operating cash flow after dividends and buybacks. For Meta, this could mean balancing aggressive growth with financial prudence, especially as CEO Mark Zuckerberg has signaled continued investments.

Risks of Overinvestment

X posts from users like Raullen.eth frame the current phase as an ‘AI frenzy,’ drawing parallels to historical tech cycles: ‘We’re in the AI frenzy phase, but the golden age for AI is yet to come.’ This perspective, echoed in TechCrunch, warns of a potential correction if AI fails to deliver proportional revenue gains.

Schultz counters this by focusing on long-term vision. In his Business Insider discussion, he described AI as essential for Meta’s evolution: ‘It’s not about spending for spending’s sake; it’s about building the future of social connection.’ This optimism is shared by some analysts, who see Meta’s AI push as a hedge against regulatory pressures and shifting user behaviors.

Competitive Landscape and Future Outlook

Meta’s strategy must be viewed in the context of rivals. Google’s parent Alphabet and Microsoft are also tripling down on AI, as detailed in The New York Times. X posts from Evan note Zuckerberg’s commitment: ‘Mark Zuckerberg just said “this will be a defining year for AI” $META plans to “bring online ~1GW of compute in ’25 and we’ll end the year with more than 1.3 million GPUs.”’

Looking ahead, Meta’s AI investments could redefine advertising and content discovery. Schultz’s defense underscores a belief that the spending boom will yield dividends, but only time will tell if it averts the pitfalls of past tech bubbles. As the industry watches, Meta’s bold bet remains a litmus test for AI’s economic viability.