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Weird Money

A newly swagged-out Mark Zuckerberg is dragging the rest of Meta into his makeover era

Meta is looking to buy a 5% stake in Supreme's new parent company.

7/23/24 1:36PM

One of the more interesting stories in tech has been Mark Zuckerberg’s wardrobe overhaul that transformed the dorky Silicon Valley CEO into a gold chain-wearing symbol of streetwear and shearling jackets, so it’s fitting that Meta may soon take a stake in one of the best-known brands in streetwear: Supreme.

Last week, EssilorLuxottica announced that it was acquiring Supreme from VF Corporation, and one day later, The Wall Street Journal reported that Meta was in talks to acquire a 5% stake in EssilorLuxottica. While I love the hypothesis that Zuck has leaned so far into his new persona that the EssilorLuxottica investment is a personal branding move to give him a stake in Supreme, The Financial Times highlighted a business explanation for the move:

People close to the deal said the eyewear group aimed to launch a new version of Supreme smart sunglasses in partnership with Meta, to better target young consumers.

Meta and Apple have been engaged in an arms race for the wearable augmented reality device market, with Apple launching its Vision Pro headset in February 2024 to counter Meta’s Quest (formerly Oculus). However, Vision Pro sales have been lackluster, with Bloomberg reporting a 75% drop in domestic sales this quarter, and CNBC noted that Meta’s virtual reality device sales in 2023 were down 40% year over year through November.

However, Meta’s partnership with sunglasses brand Ray-Ban has outperformed expectations, with the second generation of smart glasses selling more units in a few months than the previous generation did in two years, and Zuck noted in Meta’s April earnings call that the company is doubling down on wearable glasses:

Mark Zuckerberg: For Reality Labs specifically, I'm still really optimistic about building these new computing platforms long term. I mentioned in my remarks up front, that one of the bigger areas that we're investing in Reality Labs is glasses. We think that that's going to be a really important platform for the future.
Our outlook for that, I think, has improved quite a bit because previously we thought that that would need to wait until we have these full holographic displays to be a large market. And now we're a lot more focused on the glasses that we're delivering in partnership with Ray-Ban, which I think are going really well. And -- so that, I think, has the ability to be a pretty meaningful and growing platform sooner than I would have expected.

From a consumer’s perspective, it makes sense that VR sunglasses have succeeded while headsets have struggled. Headsets are large, distracting, and don’t easily integrate into our daily lives. Yes, they’re more powerful than glasses, but they are still less effective than computers for computer tasks, leaving them in the product-market-fit No Man’s Land.

Meta’s Ray-Ban glasses are, functionally, sunglasses that happen to have a built-in camera, speakers, and an “ask Meta AI” feature, allowing you to take photos, answer phone calls, listen to music, and ask questions about your environment in real time.

While headsets impose a new device on consumers, glasses have simply layered technology on top of existing wardrobes; there’s less friction. For Meta, an investment in EssilorLuxottica, especially after its Supreme acquisition, makes sense as a tactic to build a stronger competitive advantage in the wearable-AR device market.

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Rani Molla18m

Meta breaks ground on massive $10 billion AI data center — and the costs won’t stop there

Meta announced today that it broke ground on a new, giant AI data center: This one is located in Indiana, has 1GW of capacity, and will cost more than $10 billion.

In a press release, the company touted the 4,000 construction jobs and 300 operational positions Meta expects to bring to the area. It did not disclose any tax incentives tied to the project.

But much like with the company’s Hyperion data center in Louisiana, — where we calculated incentives in the billions — the number of long-term jobs is likely small relative to any public subsidies the company ultimately receives.

The $10 billion build represents a notable chunk of Meta’s planned $115-$135 billion in capital expenditures this year. And operating costs will add substantially to that total over time.

Earlier this year, Trump warned tech giants to “pay their own way” when it comes to energy, as data centers have driven up electricity costs in some regions. Meta’s announcement appears to anticipate that criticism, dedicating significant space to explaining how it will mitigate the energy and water impact of the facility:

“With all our data centers, we strive to be good neighbors. We pay the full costs for energy used by our data centers and work closely with utilities to plan for our energy needs years in advance to ensure residents aren’t negatively impacted. To help support local families in need, we’re providing $1 million each year for 20 years to the Boone REMC Community Fund to provide direct assistance with energy bills, and funding emergency water utility assistance through The Caring Center. We also pay the full cost of water and wastewater service required to support our data centers. Over the course of this project, Meta will make investments of more than $120 million, toward critical water infrastructure in Lebanon, as well as other public infrastructure improvements including roads, transmission lines and utility upgrades.”

Unlike hyperscalers such as Google and Microsoft, which can offset infrastructure costs by selling cloud capacity to customers, Meta bears those expenses largely on its own. That dynamic could make the economics of AI infrastructure more challenging for the company as its AI spending continues to accelerate.

Meta’s New Data Center in Lebanon, Indiana Marks a Milestone AI Investment

The $10 billion build represents a notable chunk of Meta’s planned $115-$135 billion in capital expenditures this year. And operating costs will add substantially to that total over time.

“With all our data centers, we strive to be good neighbors. We pay the full costs for energy used by our data centers and work closely with utilities to plan for our energy needs years in advance to ensure residents aren’t negatively impacted. To help support local families in need, we’re providing $1 million each year for 20 years to the Boone REMC Community Fund to provide direct assistance with energy bills, and funding emergency water utility assistance through The Caring Center. We also pay the full cost of water and wastewater service required to support our data centers. Over the course of this project, Meta will make investments of more than $120 million, toward critical water infrastructure in Lebanon, as well as other public infrastructure improvements including roads, transmission lines and utility upgrades.”

Jon Keegan4h

Humanoid robot maker Apptronik raises $520 million

Apptronik, an Austin, Texas-based robot manufacturer, said it has closed out its Series A fundraising round, raising $520 million. The fundraising is an extension of a $415 million round raised last February, and included investments from Google, Mercedes-Benz, AT&T, and John Deere. Qatar’s state investment firm, QIA, also participated in the fundraising round.

Apptronik makes Apollo, a humanoid robot targeted for warehouse and manufacturing work. The company is one of several US robotics companies that are racing to apply generative-AI breakthroughs to humanoid robots, in anticipation of a new market for robots in homes and workplaces.

Apptronik Raises $520 Million in New Funding to Build More Humanoids

Ives: Microsoft and Google’s giant capex plans are worth it

Don’t mind the AI sell-off, says Wedbush Securities analyst Dan Ives, who thinks fears around seemingly unfettered Big Tech capex budgets are unfounded, especially in the case of Microsoft and Google. Together, the two hyperscalers are slated to spend around $300 billion on the purchases of property and equipment this year as they double down on AI infrastructure, but he says both have already shown that they can turn the spending into revenue and growth.

“They are reshaping cloud economics around AI-first workloads that carry higher switching costs, deeper customer lock-in, and longer contract durations than before,” Ives wrote, adding that these giant costs will be spread out over time and set the companies up for success in the long run. Per Ives:

“While near-term free cash flow optics remain noisy, the platforms that invest early and at scale are best positioned to capture durable share, pricing power, and ecosystem control as AI workloads mature. Over time, we expect utilization leverage to turn today’s elevated investment into a meaningful driver of long-term value creation.”

How the Big Tech companies are spending their huge capex budgets

“While near-term free cash flow optics remain noisy, the platforms that invest early and at scale are best positioned to capture durable share, pricing power, and ecosystem control as AI workloads mature. Over time, we expect utilization leverage to turn today’s elevated investment into a meaningful driver of long-term value creation.”

Jon Keegan2/10/26

Meta reportedly expands Hyperion data center site, purchasing an additional 1,400 acres

Construction is humming along on at Meta’s gargantuan Hyperion data center in Richland Parish, Louisiana.

And Meta is seemingly already moving ahead with plans to greatly expand the site.

A new report from Forbes revealed that Meta has purchased an additional 1,400 acres adjacent to the construction site, increasing the overall size of the project by 62%. The massive size of the site is nearly 5 miles long and 1 mile wide.

Meta CEO Mark Zuckerberg has said that the site “will be able to scale up to 5GW over several years.”

Meta is quietly expanding its $10 billion Hyperion AI data center, now sprawling to four times the size of Manhattan’s Central Park | Fortune

Meta CEO Mark Zuckerberg has said that the site “will be able to scale up to 5GW over several years.”

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