Meta will suffer the most from shouldering higher data center costs

Meta is down more than 2% today — a plunge that likely has something to do with President Trump’s post Monday evening saying tech companies would have to “pay their own way” when it comes to data center electricity, rather than passing those costs on to consumers. Residential electric bills have climbed as data center demand has surged.

Microsoft has already moved in that direction, becoming the first major tech company to outline how it plans to absorb the power costs of its expanding data infrastructure, including a commitment to “pay utility rates that are high enough to cover our electricity costs.” It’s likely the rest of Big Tech will follow suit.

Which brings us back to Meta. The company, like its peers, has been ramping up spending on data center infrastructure to fuel its AI ambitions.

But Meta is different from Google, Amazon, and Microsoft: it’s largely building AI infrastructure for its own products, not for a cloud business that sells that capacity to customers. While Meta has said AI is boosting other revenue streams, primarily advertising, it isn’t a stand-alone revenue driver.

That makes higher data center electricity bills more of a liability for Meta than for its cloud-heavy peers. When Meta spends more on AI, investors tend to squirm.

Meta also confirmed Monday that it would be laying off more than 1,000 workers in its Reality Labs division as it pivots more to AI. Separately, Bloomberg reported that Meta and EssilorLuxottica are considering doubling production capacity for their AI-powered Ray-Ban smart glasses.