Tension in the boardroom
According to reporting by The Wall Street Journal, Meta's board of directors and CEO Mark Zuckerberg are locked in a serious dispute over pay and power. Zuckerberg's demand for a large stock-heavy compensation increase has triggered a crisis that has led some board members to threaten resignation.
Per the WSJ, a negotiation team of three board members began preparing a contingency plan in early September in case Zuckerberg refused to back down. That standby plan reportedly included the negotiation team's resignation from the board as a last resort.
The real issue: AI spending
While the fight is framed around pay, its root cause is Meta's artificial intelligence investments. The company reported negative free cash flow of $2.12 billion in the third quarter of 2026 — the first time it has fallen into the red since 2012.
"More spending, negative free cash flow, not enough revenue being generated from the spend [is] concerning investors that this is just sort of a bit of a money pit," Robert Pavlik, senior portfolio manager at Dakota Wealth, told Reuters.
Zuckerberg's defense
At an investor meeting in 2025, Zuckerberg argued that aggressive AI investment was a necessary risk. "I think it's the right strategy to aggressively front-load building capacity so that way we're prepared for the most optimistic cases," he said. Yet he also acknowledged at the time that the hyperscale approach to AI had created a dangerous financial bubble.
Meta's AI products have reportedly failed security testing and automation implementation, and the ongoing Muse safety controversy continues. The picture is fueling commentary that Zuckerberg's AI ambitions are colliding with financial reality.
