Meta Platforms, led by CEO Mark Zuckerberg, recently alarmed investors by announcing a significant increase in spending to establish itself as a global leader in artificial intelligence (AI). This declaration came during the company’s earnings announcement and resulted in a 15% drop in its stock price in after-hours trading on Wednesday.

The earnings report revealed that Meta, which owns popular platforms like Facebook, Instagram, and WhatsApp, saw its revenue climb to $36.5 billion for the first quarter of 2024. This figure slightly exceeded Wall Street predictions, which had pegged it at $36.2 billion, representing a 27% increase from the previous year.

Despite the positive revenue results, Meta’s financial outlook raised concerns due to an increase in projected capital expenditures. The company adjusted its capital expenditure forecast for the full year, increasing the upper limit from $37 billion to $40 billion. This adjustment aims to bolster the company’s AI infrastructure investments. In contrast, last year’s capital expenditure amounted to $28.1 billion.

Furthermore, Meta anticipates a continued rise in capital expenditures into the next year and has also revised its full-year expense guidance for 2024, raising the lower end from $94 billion to $96 billion. Revenue expectations for the upcoming quarter range between $36.5 billion and $39 billion, which is below the consensus estimate of $38.3 billion.

These developments follow a year where Zuckerberg had focused on cost reduction, job cuts, and efficiency to navigate challenging economic conditions, in an effort labeled by Meta as a “year of efficiency.” The recent shift towards aggressive investment in AI has reignited concerns over Meta’s financial management during uncertain economic times.