Wednesday night Mark Zuckerberg sat on $64.6 billion in quarterly revenue. The biggest number Meta has ever posted. Revenue up 26 percent from a year ago. The headline writers had their story.

I had a different one.

Buried in the same earnings release was a line that stopped me cold. Meta spent $34.91 billion on capital in one quarter. Its operations brought in $32.79 billion. You do the math. For the first time in over a decade, Meta spent more building things than the entire business earned in cash. Free cash flow went negative. Negative $2.12 billion.

I can't stop thinking about this. The richest social media company on earth ran out of its own money trying to build AI.

OpenAI, Amazon, Microsoft, IBM, and AMD already have multi-billion dollar deals with it.

Wall Street projects sales will triple in 2027 alone.

See why Jeff Brown calls it his one-stock pick.

And here is what nobody else is telling you. That same Wednesday, Meta also announced a brand new class of stock. Class C shares. Non-voting. One new share for every share you already own. Sounds like a free gift. It is not.

The SEC filing tells the real story. It runs 140 pages. I read it so you do not have to. At a board dinner earlier this year, Zuckerberg told his directors he might sell his $110 million Palo Alto estate and leave California. The reason? Proposition 40. It is on the November 3 ballot. If it passes, every California billionaire owes a one-time 5 percent tax on total wealth. For Zuckerberg, that could run into the tens of billions of dollars.

So Meta's board formed a special committee. Months of talks. At times they got heated. Board members pushed back. But in the end, Zuckerberg got what he wanted. A new share class he can sell to cover that tax bill. Shares with zero voting rights. He keeps his 61 percent control. You get diluted. He stays whole.

“Whoever wins AI, wins.”

That’s how President Trump sums up America’s AI race with China.

But what decides who wins the AI race?

I believe all it comes down to a radical “light-speed” technology…

Turning AI as we know it into “Accelerated AI”…

Making it 100 times faster…

And 100 times more energy efficient.

The stocks at the center of it already ripped 133%, 217%, and even 320% — in a few short months.

And it’s just getting started.

Click here to see the light-speed technology that could decide the AI race — and get my #1 pick, free.

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I don't think most people realize what just happened. Meta packaged a corporate governance deal for its founder inside an AI spending story. The headline says "Meta raises AI spending floor to $135 billion." The fine print says "Zuckerberg can now sell 80 percent of his new shares over eight years, but only if he stays in California."

Here is what worries me. Meta is not alone. The four biggest tech companies — Amazon, Alphabet, Microsoft, and Meta — plan to spend somewhere between $720 billion and $745 billion on AI this year. Combined. That is more than the entire GDP of Switzerland. It is nearly double what they spent last year. And Meta just showed us what happens when the bill comes due. The cash does not cover it.

Meta cut 15 percent of its workers over the past year. Headcount is down to 66,775 people. It spent $523,000 per employee on AI hardware in a single quarter. That is not a typo. Half a million dollars per head. On servers and data centers. Not on people.

Meanwhile, Reality Labs — the VR side of the house — burned $4.13 billion in three months. Revenue from that division? $443 million. That is $9.32 of loss for every dollar of sales.

Your S&P 500 index fund is roughly 40 percent technology stocks. Four of its top ten holdings are companies making this same bet. Meta alone makes up about 2 percent of the index. These are not small positions. This is the backbone of most retirement accounts in America.

I get it. Revenue is still growing. The ad business is a machine. But here is the number I keep coming back to. Negative $2.12 billion. That is how much cash Meta burned beyond what it earned. In one quarter. While posting record sales.

Google's co-founders already left California. So did Oracle's Larry Ellison. Peter Thiel left. David Sacks left. Zuckerberg told his board he was thinking about joining them. Meta's answer was to print shares. Non-voting shares. Shares that give you a claim on the money but no say in how it gets spent.

Nobody knows if AI will ever pay back $720 billion a year in spending. Nobody. Not Zuckerberg. Not Wall Street. Not your fund manager. The last time a handful of companies spent this hard and this fast on a technology they could not yet monetize, it was 1999. I am not saying this is that. I am saying the cash just turned red for the first time in thirteen years, and the founder's first move was to protect his own position.

For US businesses with big payrolls. Western Grazers in California hedged a state wage-law change on Kalshi. If a new rule would raise your costs, you can hold a position that it passes, so the payout offsets the hit. Federally regulated, from a few dollars.

See how hedging works

Somewhere in Palo Alto there is a $110 million house that almost went up for sale. It did not. Because a board of directors gave one man a new kind of stock so he could pay his taxes without losing power over your money.

More on this tomorrow.

— American Ledger