Meta Platforms is tightening employee stock compensation once again as it redirects enormous financial resources toward artificial intelligence. According to a report by the Financial Times, the company has reduced its annual stock option distribution by about 5% for most staff, marking the second straight year that equity awards have been scaled back.

The move follows a steeper reduction last year, when Meta cut stock-based awards by roughly 10%. For many employees in Silicon Valley, stock grants form a significant portion of overall compensation, often representing long-term wealth-building opportunities tied to company performance. A second consecutive cut underscores a noticeable shift in how Meta is balancing employee incentives with its escalating infrastructure costs.

The company, which owns major social media platforms such as Facebook and Instagram, has not publicly commented on the reported changes. However, the broader context suggests a deliberate recalibration of spending as AI becomes the central pillar of its strategy.

Billions Committed to Artificial Intelligence Expansion

Under Chief Executive Officer Mark Zuckerberg, Meta has placed artificial intelligence at the core of its long-term ambitions. The company is aggressively expanding its computing infrastructure to support the development of advanced AI systems, including large-scale generative models and enterprise-grade tools.

In January, Meta projected that its capital expenditures for 2026 would fall between $115 billion and $135 billion. These figures reflect the staggering costs associated with constructing next-generation data centers, securing advanced semiconductor chips, and maintaining the massive power requirements necessary to run AI training workloads.

Unlike traditional product development cycles, AI infrastructure demands enormous upfront investment. Data centers designed for AI processing must operate at unprecedented scale, often measured in gigawatts of electricity usage. These facilities require not only high-performance computing hardware but also specialized cooling technologies and reliable energy supplies.

One of the company’s most prominent projects is a large data center complex planned in rural Louisiana. U.S. President Donald Trump has said the development could carry a price tag of up to $50 billion. The project reflects Meta’s determination to anchor its AI expansion within the United States while building the computational backbone needed to compete globally.

The Intensifying AI Infrastructure Race

Meta’s spending surge is unfolding amid fierce competition across the technology sector. Major firms are racing to outbuild one another in what has effectively become an infrastructure arms race. The battle is no longer limited to software innovation or consumer applications; it now centers heavily on physical capacity—who can build and operate the most powerful AI systems at scale.

Gigawatt-scale data centers have become strategic assets. The ability to train larger models faster and more efficiently could define the competitive landscape for years. For Meta, this means prioritizing infrastructure investments even if it requires trimming other areas of spending, including employee equity packages.

Compared with earlier phases of its growth—when the company concentrated primarily on expanding its social networking platforms and digital advertising dominance—the current spending levels represent a dramatic escalation. AI development has fundamentally reshaped corporate budgeting across Big Tech, with Meta positioned among the highest spenders.

Restructuring and Shifting Priorities

The reduction in stock awards comes alongside broader organizational adjustments. Recently, Meta laid off about 10% of employees within its Reality Labs division, which previously had around 15,000 staff members.

Reality Labs is responsible for Meta’s virtual and augmented reality initiatives, including its long-term vision for immersive digital environments often referred to as the “metaverse.” Since 2021, the division has accumulated losses exceeding $70 billion, highlighting the financial strain associated with hardware innovation and experimental technologies.

The layoffs signal a strategic shift. While Meta continues to develop wearable devices and mixed-reality products, its emphasis appears to be tilting more decisively toward AI-driven services. Resources are being reallocated from certain virtual reality initiatives to projects that align more closely with artificial intelligence and its near-term revenue potential.

For employees, these changes mark a significant transition. During the pandemic-era tech boom, Meta expanded rapidly, offering competitive compensation packages and hiring at scale. The current environment reflects a more cautious and efficiency-focused mindset, where capital discipline is increasingly prioritized.

The Talent Equation

Reducing equity compensation is not without risks. Stock-based awards are a critical tool for attracting and retaining top engineers, especially in competitive fields such as AI research and machine learning. As demand for AI expertise intensifies, maintaining morale while adjusting pay structures presents a delicate balancing act.

Equity grants also align employee incentives with long-term company performance. Scaling them back may generate cost savings in the short term, but it could influence how employees perceive their future earnings potential.

Meta has already undergone multiple rounds of layoffs and restructuring over the past two years. Those efforts followed a period of aggressive hiring that significantly expanded the company’s workforce. Now, leadership appears focused on ensuring sufficient financial flexibility to sustain its AI buildout, even if it requires difficult trade-offs.

Strengthening Government and Investor Relationships

In parallel with infrastructure expansion, Meta has moved to bolster its connections with policymakers and investors. The company recently appointed Dina Powell McCormick as president and vice chairman, a leadership addition viewed as an effort to deepen partnerships to its AI initiatives.

Large-scale data center projects often depend on coordination with federal and state authorities, particularly when addressing power grid capacity, environmental regulations, and local economic incentives. Strengthening relationships in these areas could prove critical as Meta continues to roll out multi-billion-dollar facilities.