The news: Meta signed a five-year deal to spend up to $27 billion on AI infrastructure from cloud provider Nebius Group to support and diversify its technology stack. It’s one of Meta’s biggest single contracts and builds off a separate $3 billion deal that Meta and Nebius signed last year, per Bloomberg.

At a time when Meta is struggling to keep up with competitors—it delayed a major model launch last week—a deal of this size could supercharge the products Meta can develop and deploy.

Amid news of the Nebius deal, Meta is reportedly considering layoffs that could affect over 20% of the company, three sources told Reuters. Based on the headcount in Meta’s Q4 2025 earnings report, more than 15,000 employees could be cut.

Meta’s potential layoffs would exceed the layoff batch of 13%—or 11,000 employees—it cut in late 2022, yet fall below the total number of layoffs in less than six months when it made an additional 10,000 cuts in Q1 2023.

Trendspotting: While Meta may be trimming its headcount again, it’s not pulling back in the race to build out AI—Meta and its Big Tech peers are all spending sky-high amounts.

• Meta committed to investing $600 billion in US infrastructure and jobs by 2028.
• It projected between $115 billion and $135 billion in capital expenditures in 2026 alone, a 259% increase since 2022. That’s still well below Amazon’s and Alphabet’s projected capex.

Meta is also leaning heavily on its profitable ad business to support an AI arms race that may reshape its cost structure and workforce. This means its AI spending spree could intensify pressure to cut costs elsewhere, including jobs.

Why it’s worth watching: Meta’s infrastructure commitments show how central AI has become to its core business, from improving ad targeting and measurement to building AI-powered campaign tools and ad tech.

However, locking in tens of billions in compute capacity years in advance raises the stakes: Meta will need its ad engine and AI products to deliver enough revenues and efficiency gains to justify the massive spend.

Implications for brands: This deal could accelerate the rollout of AI-driven ad tools on Meta’s platforms and give brands more automated ways to generate creative, optimize campaigns, and execute performance marketing.

However, stalls in its model releases indicate development may not be moving as quickly as spending—brands should diversify their ad tech stack with third-party tools when advertising on Meta platforms to keep capabilities up to par with competitors.