Mergers and acquisitions + poaching talent + heavy investment, Meta is making all-out efforts to sprint in the AI track

According to reports, Meta Platforms (META.US) is in talks with AI video company Pika for collaboration and is discussing potential acquisition or technology licensing deals. The report also adds that this social and tech giant had previously engaged in acquisition negotiations with Higgsfield, a company focused on image and video generation for creator users, but those negotiations have currently ceased.

Since the beginning of this year, Meta has been actively pursuing AI-related transactions. In June, Meta acquired a 49% stake in data platform Scale AI for nearly $15 billion and subsequently appointed Alexandr Wang, the 28-year-old CEO of Scale, as Meta's head of AI. In July, Meta also acquired a small AI voice generation startup, PlayAI, which focuses on human-like voice generation, although the terms of the deal were not disclosed. Prior to this, Meta had attempted to acquire Perplexity AI, Runway AI, and FuriosaAI.

Meanwhile, Meta has been poaching high-end AI talent from competitors such as Google (GOOGL.US), OpenAI, and Apple (AAPL.US) by offering substantial salaries to build a strong "Meta Superintelligence Labs (MSL)" team. In July alone, Meta recruited several researchers from OpenAI, including Shengjia Zhao, Jiahui Yu, Shuchao Bi, Hongyu Ren, Lucas Beyer, Alexander Kolesnikov, and Xiaohua Zhai. Meta also brought in Daniel Gross, CEO of startup Safe Superintelligence, and former GitHub CEO Nat Friedman to join MSL. Earlier this month, Meta successfully lured Ruoming Pang, head of Apple's large language model team, with a $200 million compensation package, and subsequently recruited Mark Lee and Tom Gunter from Apple, both of whom previously worked under Ruoming Pang.

To support the advancement of its superintelligence plans, Meta is seeking to raise $29 billion, with $3 billion coming from private equity firms such as Apollo Global Management (APO.US), KKR (KKR.US), Brookfield (BAM.US), Carlyle (CG.US), and Pimco, while the remaining $26 billion will be raised through debt.

It is worth mentioning that Meta announced strong second-quarter revenue and third-quarter guidance this week, indicating that the tech giant's advertising business continues to grow rapidly, sufficient to support its massive expenditures in the AI field. Data shows that Meta's second-quarter revenue was $47.52 billion, a 22% year-on-year increase, exceeding market expectations; diluted earnings per share were $7.14, a 38% year-on-year increase, also better than market expectations Meta expects third-quarter revenue to be between $47.5 billion and $50.5 billion, with the midpoint exceeding analysts' average expectation of $46.2 billion.

Additionally, Meta has raised the lower end of its capital expenditure forecast range for 2025, as the company continues to invest heavily in talent, infrastructure, data centers, and energy to remain competitive in the rapidly evolving AI race. The company currently expects its spending this year to be between $66 billion and $72 billion. This forecast was already adjusted upward in April, considering ongoing trade disputes and AI investments. Meta stated that costs will continue to grow at a faster pace next year, particularly with increased spending on infrastructure development and employee compensation.

Hargreaves Lansdown stock analyst Matt Britzman said, "All this spending will have some impact on the company's profitability in the short term, but in the long run, Meta is expected to be a clear winner in the AI space." He noted that Meta performed "extremely well" in the second quarter, partly due to improvements in AI that allowed the company to increase the average price of its ads