Meta Launches Low-Cost AI Model and Custom Iris Chips

Shares of Meta Platforms rose approximately 15% during the week ending July 10, 2026, as the company unveiled a strategy to monetize its massive artificial intelligence infrastructure. The company launched Muse Spark 1.1, a multimodal AI model for agentic coding tasks developed by Meta Superintelligence Labs. This model serves as the company's first paid frontier AI API, priced aggressively to undercut rivals OpenAI and Anthropic.

To further reduce reliance on Nvidia and AMD, Meta will begin producing its custom Iris AI chips in September through partnerships with Broadcom and TSMC. The company is also expanding its physical infrastructure, announcing a C$13 billion data center campus in Alberta, Canada. Meta aims to increase its total compute capacity from 7 gigawatts in 2026 to 14 gigawatts by 2027.

CEO Mark Zuckerberg confirmed that the company is establishing a cloud infrastructure business, internally called Meta Compute, to lease excess AI computing capacity to third parties. These initiatives are intended to transition projected 2026 capital expenditures of $125 billion to $145 billion from a cost center into a revenue generator.

Despite the stock surge and strong quarterly revenue of $56.31 billion, the company faces regulatory challenges. The European Commission issued preliminary findings that Meta's platform designs breach the Digital Services Act due to addictive features in Facebook and Instagram, potentially exposing the company to a $12 billion fine.