The government is awaiting advice from the Australian Competition and Consumer Commission on its ability to designate Meta under the news media bargaining code, and the potential impact for publishers.

Shares tumbled more than 11 per cent in after-hours trading after the social networking company projected the same revenue for the second quarter when analysts expected $US38.2 billion, and raised its cost guidance for the year to between $US35 billion and $US40 billion. Earlier this year, it estimated expenses related to items such as servers, AI hardware and data centres would be $US30 billion to $US37 billion.

The stock was up 39 per cent this year so far at market close and has been trading near all-time highs for the past month, in part reflecting excitement around AI.

“We expect capital expenditures will continue to increase next year as we invest aggressively to support our ambitious AI research and product development efforts,” chief financial officer Susan Li said in a statement.

Meta has been spending up to compete on AI against other tech peers like Microsoft and Google’s parent company Alphabet, which is driving some of the increase in expenses. The company announced plans for a new $US800 million data centre in January, and is also developing its own chips for artificial intelligence services. Meta is also working on several new iterations of its large language model, known as Llama, for powering chatbots and other AI services.

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In the previous quarter, Zuckerberg announced a $US50 billion stock buyback in addition to the company’s first-ever quarterly dividend, an effort to placate investors frustrated by the company’s aggressive spending on technologies that have yet to pay off. Zuckerberg has spent years ploughing money into efforts to build the so-called Metaverse, a virtual world in which he hopes people will one day play and work.

Reality Labs, the Meta division focused on its futuristic bets, reported a loss of $US3.85 billion for the first quarter, roughly the same as a year ago. That division, which also oversees VR headsets and Meta’s Ray-Ban smart glasses, reported an annual loss of more than $US16 billion in 2023.

The company reiterated its broader 2024 spending plans, saying it would shell out $US96 billion to $US99 billion for the calendar year, up slightly from a low-end target of $US94 billion to $US99 billion. It previously said much of that would go toward infrastructure costs in addition to long-term bets on augmented and virtual reality.