STORY: Shares of Facebook parent company Meta Platforms fell sharply in after-hours trading on Wednesday.
Shares fell about 15% after higher expenses and a weaker-than-expected revenue outlook.
The primary driver of cost increases is spending on the infrastructure needed to power AI and new products.
Mehta said the total cost could reach $99 billion.
President Mark Zuckerberg said investment would need to increase “meaningfully” to generate significant revenue from the new service.
The company has developed products such as chat assistants aimed at driving engagement on social media platforms.
But one analyst told Reuters that investors fear it could take years to pay it all back.
Shares of other big AI companies, including Microsoft and Nvidia, fell after warnings about costs.
Meta's first-quarter sales of $36.5 billion were roughly in line with expectations, but its outlook for the April-June period was slightly lower than expected.
The company could also benefit from U.S. moves against rival TikTok.
Lawmakers passed a bill this week that would allow a ban on Chinese-owned short video networks.
Allegations of posing a threat to national security are now over.
But Susan Lee, Meta's chief financial officer, says it's too early to assess the impact of such a move.
