• Meta's AI agent, Muse, is unprofitable due to "very high compute costs," CEO Mark Zuckerberg says.
• Meanwhile, Meta expects Reality Labs, its AI glasses division, to lose $15 billion next year.
• The social media giant has a plan to fix that.

Meta says some of its biggest cash incinerators could finally start turning profits.

The social media giant, which generated over 97% of its quarterly revenue from ads, has faced persistent questions from investors about the lack of profitability in its AI and hardware initiatives.

Meta CEO Mark Zuckerberg addressed those concerns head-on during its third-quarter earnings call on Wednesday.

Zuckerberg said that Muse, the AI assistant it launched last month, is unprofitable since it's "very compute intensive to run." Meta expects to start turning that around next year by massively improving Muse's efficiency.

"If compute efficiency continues improving quickly for another few years, which we think is highly likely, then Muse will be highly profitable over multiple years," he said.

Meta plans to make money from Muse by taking a small transaction fee off of purchases it drives, Zuckerberg said at Meta's Connect conference last month.

Zuckerberg added that Muse, which launched only in the US and Canada, wasn't launched globally due in part to the amount of compute it requires. (Meta's North American users are generally its most lucrative.)

Zuckerberg also struck a positive note about its cash-hemorrhaging Reality Labs division, which makes products like Meta Ray-Bans and virtual reality glasses.

Meta expects Reality Labs to narrow its losses to about $15 billion in 2027, down from the $18 to $19 billion it expects to lose this year. The division should start trending toward profitability next year, as Meta's AI systems make it more useful, Zuckerberg said.

"I continue to believe that the path to delivering holographic experience, of bringing together the physical and digital worlds and everyday glasses, will come through VR first," Zuckerberg said.

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• Meta spent $34.91 billion in capital expenditures in its third quarter.
• The company is spending big on data centers and other infrastructure for its AI development.
• Meta predicted $135-145 billion in capex for 2026, aligning with analyst expectations.

Meta is making it rain for AI.

The company spent $34.91 billion in capital expenditures during the third quarter of 2026. That's up from the second quarter's sum, $31.08 billion.

For the year 2026, Meta said it expects to spend between $135-145 billion in capital expenditures, narrowed from its prediction of $130-145 billion last quarter.

Meta's forecast includes the yearly capex prediction that analysts expected: $139.79 billion.

As Meta bets big on AI, it is investing heavily in its development. It has built massive, costly data centers and spent big on computing power.

The spending uptick was expected. On the "Cheeky Pint" podcast earlier this month, CEO Mark Zuckerberg recounted early conversations about the investment — and said he'd bet up to $200 billion on AI, before he knew the models would work.

Investors haven't loved Meta's massive capex forecasts in past quarters. The stock tumbled almost 10% last quarter after earnings per share missed Wall Street estimates, and sank 6% the quarter before on raised capex guidance.

This quarter, Meta has a new hero product: Muse.

The AI assistant has reached over 2 million daily users and 3 million downloads. It quickly scaled the App Store. Muse users told Business Insider they chatted with it to help plan trips and ace exams.

The energy around the company is ebullient, as Alexandr Wang, Meta's chief AI officer, continues to post memes of Muse's squishy-looking mascot.

At Meta's Connect keynote event in September, Zuckerberg said Muse "has a novel business model."

"We believe that Muse will make you money, and we're standing behind this by making Muse free for a huge number of tokens with the expectation that over time, we will profit by taking a small fee from transactions," he said.

Muse could help justify the capex guidance for some investors. The stock was trading up 4.12% after-hours at the time of publication.

• SpaceX's earnings reveal growing capex as well as AI revenue that surpassed its Starlink business for the first time.
• The company reported overall capex spending in line with estimates. It projected it could double in the current quarter.
• AI-related spending was slightly less than expected but still more than previous quarters.

SpaceX's second-ever earnings report revealed it's spending more than ever on AI — and that could soon double.

SpaceX reported spending $16.4 billion on AI-related capex in the third quarter, continuing the acceleration of AI spending seen in recent quarters.

SpaceX spent roughly $19.6 billion on overall capital expenditures in the third quarter as Grok maker continues its AI buildout. That was squarely in line with what Wall Street analysts were expecting.

Of that $19.6 billion, SpaceX reported spending $16.4 billion on AI-related capex. Analysts were expecting $16.9 billion.

SpaceX expects capex to balloon in the current quarter, with CFO Bret Johnsen forecasting $35-$40 billion due to new compute coming online. Johnsen also said SpaceX expects to quickly see returns on its investments.

"At current pricing, new compute deployments are generating a payback of less than a year," he said.

SpaceX's stock was trading up 4% after hours following the results. The company is broadcasting the earnings call on X, becoming one of a small list of companies to broadcast video of the gathering.

During the earnings call, SpaceX CEO Elon Musk said that chips are no longer the biggest constraint to AI buildout.

"So talking about SpaceX superintelligence, SpaceXSI — "sexy," whatever — so as I think people are starting to realize the constraints on deployment of superintelligence is more in power and cooling and infrastructure than it is in chips," he said.

SpaceX's AI revenue grew significantly quarter-over-quarter to $7.6 billion — ahead of analysts' estimates of $6.3 billion. This report also marks the first quarter since SpaceX purchased Cursor.

That revenue means that SpaceX's AI segment officially brought in more revenue than its Starlink business. Starlink brought in $5.2 billion for the quarter.

SpaceXAI has since rebranded as SpaceXSI, following Musk's alignment with President Donald Trump's preferred rebranding of "artificial intelligence" to "super intelligence."

One area where SpaceXSI has found some success is leasing its compute to Anthropic, Google, and Reflection AI. During the company's last earnings call, SpaceX CFO Bret Johnsen said the leasing arrangements had generated $1.6 billion in additional revenue.

Musk said that SpaceX is being inundated with lease requests.

"We are also frankly hounded relentlessly by every hyperscaler and by dozens of smaller companies to rent more of our compute," he said. "So we could rent out our compute several times over if we said yes to everyone."

Overall, he said the allocation for SpaceX compute is something "that's going to change from one month to the next."

"I guess as a rough approximation, our goal is to kind of split it 50/50 more or less, where half of the compute is used internally, and half of it is rented to others," he said. "But that number could shift 60/40 one way or the other."

Correction: Tuesday, October 20, 2026 — An earlier version of this story incorrectly included two values for SpaceX's overall capex. The correct value is $19.6 billion.