Meta and Microsoft maintain an unusual partnership despite being AI competitors. Since May 2022, Meta has been using Microsoft Azure infrastructure, including approximately 5,400 GPUs, for its artificial intelligence research, notably on the Llama model family. Microsoft saw its capital expenditure surge 70% to $41 billion in the second quarter, while Meta’s free cash flow collapsed 91% to just $784 million despite solid revenue growth of 28% to $60.8 billion. The company also raised its 2026 capital expenditure guidance to a range of $130 billion to $145 billion. Reports in early July indicated that Meta is developing its own cloud infrastructure business to sell excess AI computing power to third parties, which would place it in direct competition with AWS, Azure, and Google Cloud.
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