S&P Global has changed Meta’s credit outlook from stable to negative, citing the scale of its AI infrastructure spending and projecting a $71 billion cash-flow deficit in 2027. Meta has not been downgraded: its rating remains AA-, but the outlook shift puts its borrowing and investment plans under closer scrutiny.
Meta AI Watch analysis
What happened
Coinpaper reports that S&P expects Meta’s free operating cash flow to fall to negative $71 billion in 2027, with elevated spending potentially keeping it below zero beyond 2028. Meta’s latest guidance puts annual capital expenditure at $135 billion to $145 billion.
The company had $80.92 billion in long-term debt and $82.45 billion in cash, cash equivalents and marketable securities at the end of September, according to the report. It also says Meta disputes S&P’s assessment, arguing that its AI investments create opportunities for new products and business growth.
Why it matters
This is a ratings outlook change, not an immediate downgrade. But it signals that S&P sees a greater chance that spending on chips, data centres and computing infrastructure will outpace the returns those investments generate. That matters beyond Meta: the AI build-out is large enough to put pressure on even a highly rated company’s cash flow and financing choices.
The figures are forecasts, not a bill already due. Still, a projected $71 billion shortfall is a rather less abstract way to discuss the cost of building AI capacity than another slide deck labelled “investment”.
Our read
The useful tension is that Meta can be growing its advertising business while its AI expansion strains free cash flow. S&P’s warning does not settle whether the investment will pay off, and Meta says it sees significant opportunities. The next test is whether those opportunities turn into returns before borrowing and spending further weaken the financial picture.
What to watch
- Whether S&P changes Meta’s AA- rating or revises its outlook again.
- How Meta’s AI infrastructure spending and free cash flow develop through 2027.
- Whether Meta can show measurable revenue gains from AI products and advertising improvements.
Discussion spark: How much financial strain should investors accept as a reasonable price for building AI capacity, and what evidence would convince you the investment is paying off?
Sources and evidence
- Source update (31 October 2026, 13:07 UTC)
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