Meta sits on a massive $50.5B Construction in Progress (CIP), adding $6.5B worth of CIP QoQ, equivalent to two JPMorgan Chase Towers (!)
What does Meta's 10-K tell us?
1. Meta has over $50.5B worth of CIP as of December 31, 2024, representing 88% growth YoY. In 2022, 2023, and 2024, this figure remained relatively flat. Remember that CIP, once completed, transfers from Construction in Progress to fixed assets. I recommend reading my article below on this topic.
2. Meta added $6.5B in CIP QoQ, equivalent to two JPMorgan Chase Towers (!). Either Meta discovered a construction methodology rivaling China's execution speed (perhaps Zuck should advise the Administration on this approach), or some very expensive equipment sits within CIP. GPUs, perhaps?
3. We can confirm that Meta no longer feels comfortable disclosing how many servers and network equipment components are held by suppliers as part of Construction in Progress (CIP). They discontinued this disclosure in the 2024 10-K. Given the unusual growth in CIP during 2024, investors would reasonably expect greater transparency regarding the composition of these assets. However, Meta has decided investors don't need this level of detail. I performed a rough calculation in the referenced article. Just add a few billion dollars (1B to 3B) that were added QoQ.
Thank you very much for all the insights. Just wondering what you see how things are going to unfold when some of the GPUs are starting to be put on balance sheet as depreciations. Surely reported earnings will go down. I do wonder how it affects Nvidia, who’s recognizing all these revenues in storage. When will the music stops? OpenAI is making all these vendor financing deals. As soon as OpenAI runs out of cash, the music will stops for everyone. But then, my fear is, OpenAI is too big to fail? And people/companies in power will stop it from failing at all costs? Would like to hear your thoughts.