MENLO PARK, California: Meta Platforms' cost to insure its debt against default hit an all-time high on October 22 as investors grew increasingly concerned about the social media giant's rising AI spending and plans to issue new shares to fund it.

Meta shares fell more than seven percent, putting the company on course to lose about US$114 billion in market value if the losses hold.

The selloff came despite better-than-expected results and a strong forecast, highlighting investor unease over AI spending that is pushing historically cash-rich technology companies to take on debt. The expenditure also pushed the Facebook and Instagram owner to its first cash burn in more than a decade.

On October 21, Meta raised the lower end of its capital expenditure forecast by $5 billion, taking the range to $135 billion to $145 billion.

The spending will support the company's plan to put its Muse agent at the center of its AI strategy and turn a technology that has gained traction largely with businesses automating coding into a consumer moneymaker.

To help finance the push, Meta plans to create a new class of non-voting shares called Class C. The company said it could raise hundreds of billions of dollars over several years to fund AI investments, acquisitions and employee compensation, with issuances beginning as early as fall 2026.

The filing said the issuances would help Meta avoid debt financing that could adversely affect its credit ratings.

Meta's five-year credit default swaps were trading at a record 114.79 basis points on Thursday.

However, Shay Boloor, chief market strategist at Futurum Equities, said the move was not necessarily a sign that Meta's fundamentals were deteriorating.

The surge in CDS spreads "could have more to do with banks hedging exposure to Meta's massive AI debt financing than actual default risk," he said.

Investors have already been concerned this month about mounting AI debt, selling shares of neocloud companies such as CoreWeave and Nebius that are spending several times their revenue on data centers to serve growing order backlogs.

Experts have said the borrowing leaves AI companies vulnerable to a sharp decline in demand while saddling them with chips that depreciate within five or six years, forcing another round of spending to remain competitive.

Meta shares had gained more than five percent this year as of the close on October 21.