S&P turns negative on Meta as 2027 AI spending forecast tops $225bn

Meta has spent most of 2026 persuading investors that its artificial intelligence budget will pay for itself. On Friday, October 30, the first of the large credit rating agencies said it was no longer sure. S&P Global Ratings revised its outlook on Meta Platforms to negative from stable, while affirming the company's AA- issuer credit rating. A negative outlook is not a downgrade, but it is the formal warning that one may follow.

The reason is the scale of the spending. S&P now forecasts Meta's capital expenditure at $140 billion in 2026, more than $225 billion in 2027 and $252 billion in 2028. Its earlier forecasts for the last two years were $163 billion and $178 billion. On those numbers, Meta would run free operating cash flow deficits of $22 billion in 2026, $71 billion in 2027 and $39 billion in 2028, where S&P had previously expected a return to positive cash flow by 2028. PPC Land calculated the cumulative three-year shortfall at $132 billion.

S&P's concern is less the debt Meta issues than the leases it signs. The agency counts data centre leases as debt-like obligations, and warned they could push Meta's leverage measure above its 1.0 times downgrade threshold as early as 2027, rising to 1.3 times once leases commence in 2028. Future lease obligations reached $355.7 billion, up from about $279 billion in the second quarter. Meta has already raised $37.5 billion in new equity and plans a further $60 billion through an at-the-market programme starting in January 2027, but S&P left that out of its numbers. "Note that we do not include future equity issuance in our forecast," the report said.

The sharpest line was about advertising. "In our view, Meta's ability to monetize its AI investments is more limited than that of its peers," S&P wrote. The comparison is pointed. Alphabet, Amazon and Microsoft sell cloud computing to outside customers, so their data centres generate revenue directly. Meta's return depends almost entirely on whether AI improves the targeting, ranking and creative of the ads it sells and on whether new products such as its AI assistant can be monetised. Meta has not yet disclosed its 2027 spending plans, and the rating agency is in effect pricing them before the company does.

Alphabet is spending at a similar pace and looking further afield for capacity. Google said in a post dated October 30 that its Project Suncatcher prototype satellite answered its first prompt from orbit, a three-line haiku written by the open Gemma 4 model running on a data-centre-class TPU. The satellite, built with Planet, launched on October 1 aboard SpaceX's Transporter-18 rideshare mission. The prompt was sent up during a ground-station pass and the reply came down as the satellite passed Svalbard, Norway. "Our chips have officially earned their space wings," said Travis Beals, senior director of Paradigms of Intelligence at Google. Thermal and radiation testing comes next, followed by twin interconnected satellites in 2027. Google gave no performance data, chip count or mission cost. Alphabet's spending on property and equipment reached $131.95 billion in the first nine months of 2026, more than double the $63.60 billion of a year earlier.

France votes for a tax on every gigabyte

In Paris, a thinly attended vote produced a proposal that would change the economics of streaming and digital advertising in France. On October 30, the National Assembly adopted an amendment to the 2027 finance bill taxing content providers €0.055 for every gigabyte delivered to French subscribers. The vote was 11 to 10, with 14 abstentions. Only 35 deputies took part out of 574 seats, and the abstention of the Rassemblement National decided the outcome.

The amendment, numbered I-1358, was filed on October 9 by the Socialist deputy Laurent Lhardit with 67 co-signatories. It caps the levy at 15% of a company's French revenue or 2% of its total revenue. Its authors expect €10 billion a year, citing the telecoms regulator Arcep's estimate of 200 billion gigabytes sent to subscribers in France. Internet access providers would meter the traffic. "This model raises no privacy issue: the data is never consulted," the written justification said. The government opposed the measure, and so did the finance committee's general rapporteur, Philippe Juvin. His objection went straight to the advertising market: "The risk is that they pass the weight of this tax on to advertisers."

The vote is a first-reading step in a bill that has not been enacted, and the collection method depends on a decree that has not been written. The authors did not explain how they reached the €10 billion figure, and the amendment does not say how advertising delivered through content delivery networks would be attributed to the companies that sell it. Video is the heaviest traffic on any network, which means streaming services and video platforms such as YouTube and Netflix would likely carry most of the burden.

French publishers took a separate route against Google the same week. Five organisations, the CPA, FNPS, GESTE, SEPM and SPIIL, have complained to the European Commission about Google's rollout of AI Overviews and AI Mode in France, in a joint statement dated October 29 in Paris. Google switched on both features in France on July 22. "Publishers depend heavily on its search engine to reach their audiences," the statement said. The groups argue that their content feeds features that can replace visits to their sites, without transparency or effective control. The complaint adds French evidence to the Commission's formal antitrust investigation under Article 102 of the Treaty on the Functioning of the European Union, opened in December 2025, in which fines can reach 10% of Google's global annual revenue. The statement gives no traffic or revenue data and does not mention the Search Console opt-out from AI features that Google began rolling out on July 20.

The Check My Ads Institute, a Washington nonprofit, set out a broader version of the same argument. Its report, "The Crocodile Effect: How Platforms Eat Their Own Supply Chains", written by Anastasia Micich and published on October 7, argues that Google profits twice from publisher content: once by keeping users on its pages with AI Overviews, and again when advertising budgets flow to made-for-advertising sites through its ad technology. "Google is effectively eating its own supply chain," the report says. It calls for antitrust action to break up Google and for identity verification rules for any company paying publishers for ad space. "Structural separation is not punitive overreach, nor too technically complex, nor impossible," it argues. PPC Land noted that the report contains no original research, that many of its figures date from 2020 to 2024, and that it does not address Judge Mehta's October 1 dismissal of Penske Media's AI Overviews lawsuit.

X brings back lead generation ads

X reopened a format Twitter abandoned almost a decade ago. On October 30, it made Lead Gen Ads generally available to all advertisers, including small and self-serve accounts, in X Ads Manager. The in-feed form lets people submit contact details without leaving X, and a new Leads Center lets advertisers export submissions or send them to a CRM. Image, video, carousel and Timeline Takeover formats are supported. "Advertisers have been asking for a simpler way to capture leads where the conversation is already happening," said Monique Pintarelli, head of global advertising at X.

The evidence is thin and contradictory. X's only case study is micro1, a beta advertiser, which X says cut its cost per lead by 75%. Daniel Warner, micro1's chief marketing officer, put the figure at 33%. Twitter launched lead generation cards in 2013 and announced their removal in December 2016. The return comes as X's advertising business remains far smaller than it was: eMarketer estimates X's ad revenue at $1.25 billion in 2025, down from $2.43 billion in 2021. Pricing, bidding options, data retention in the Leads Center and CRM partners were not disclosed.

Pinterest, Roblox and the cost of growth

Pinterest's third-quarter results, published on October 29, showed how a change in European customs rules can reach an ad platform. Revenue rose 12% to $1.174 billion, below the company's own guidance of $1.19 billion to $1.21 billion. Bill Ready, the chief executive, attributed about three points of the shortfall to cross-border sellers who pulled back after the EU replaced its duty-free threshold for parcels under €150 with a flat €3 charge per item from July 1. In Europe, cross-border sellers cut revenue growth by 11 points, leaving the region's revenue roughly flat at $193 million. "The pullback from cross-border sellers represented roughly an 11-point drag on Europe's year-over-year growth," Ready said. He added: "We do not expect cross-border spend to come back for the holiday." Impressions grew 17% while ad pricing fell 4%. Fourth-quarter guidance is $1.425 billion to $1.475 billion, or growth of 8% to 12%.

Roblox told analysts on its October 29 call that advertising is becoming a growth channel for its own developers. David Baszucki, the co-founder and chief executive, said developers are buying ads for traffic as more than 80% of top games use AI in their creation. "There's also an inflection point going on in our ad system as more devs are using ads to buy traffic," he said. More than 70% of the top 100 games run sponsored ads, and two almost entirely AI-generated titles reached the top 20 by concurrent players in the third quarter. Roblox will test skippable pre-roll video ads in selected cohorts and countries. The market focused on the guidance. Naveen Chopra, the chief financial officer, forecast fourth-quarter bookings down 10% to 15% year on year, and the shares fell 16.98% to $43.55 after hours. Roblox did not disclose advertising revenue, advertiser counts or its return-on-ad-spend threshold.

Twitch, owned by Amazon, gained audience in the third quarter while its rival grew faster. Streams Charts reported on October 13 that Twitch recorded 4.51 billion hours watched, up 4% on the second quarter and its strongest since the second quarter of 2025, while Kick grew 30.7% to 2.04 billion hours. Streams Charts gives Twitch 14.2% of tracked livestream hours, behind YouTube at 43% and TikTok LIVE at 33.5%. That sits awkwardly beside Amazon Ads' claim to brands in June that Twitch "commands 60% of the global livestreaming landscape", a figure given with no metric or period. "More than a third of viewer spending goes toward Hype Trains alone," said Mike Minton, Twitch's chief product officer. Amazon does not disclose Twitch revenue, and its latest quarterly filing does not mention the service.

Streaming in Europe and on smart TVs

Viaplay Group left the Netherlands on October 30, when it completed the sale of its Dutch business to Videoland, the streaming service owned by DPG Media, for €142 million on a cash and debt free basis. The Stockholm-listed group expects to keep about €100 million after transaction costs, restructuring and payments on legacy multi-year agreements, and will use the money to cut net debt, which stood at SEK 5.42 billion at the end of September. "The proceeds will enable us to reduce net debt levels and strengthen our financial position," said Jørgen Madsen Lindemann, the chief executive. The Dutch unit had 2025 net sales of €149 million. Viaplay did not disclose its profit, subscriber numbers or which sports rights transferred.

Deezer, the French music streaming service, reported third-quarter revenue up 1.8% to €133.8 million on October 27 and raised its 2026 outlook to slight revenue growth. Direct revenue, from people who subscribe through Deezer itself, rose 7.0% to €94.1 million, while partnerships revenue fell 6.2% as partner subscribers dropped 17.1% to 2.9 million. The line that includes advertising, labelled Other, fell 19.5% to €6.4 million. Deezer said it has excluded more than 42 million AI-generated tracks from recommendations since January 2025. "We continue to invest selectively in future growth and remain on track to generate positive free cash flow," said Alexis Lanternier, the chief executive.

On television sets, ad-funded gaming is finding its audience in families. PHYND, a free cloud gaming service for smart TVs, said on October 30 that five family franchises, The Smurfs, Garfield, Kao the Kangaroo, My Universe and Asterix, take 41.5% of play hours among its loyal players, against 24.2% for lighter users, and that those loyal players generate 81% of all gameplay. PHYND did not say how many players, sessions or hours its figures cover, nor over what period.

LG Electronics, whose webOS platform powers its smart TVs and its advertising business, returned its television unit to profit. The Media Entertainment Solution division swung to an operating profit of KRW 146.7 billion in the third quarter from a loss of KRW 302.6 billion a year earlier, credited partly to webOS platform growth. The company's HVAC unit went the other way: LG's Eco Solution operating profit fell 34.4% to KRW 87.2 billion on flat sales. LG warned of weaker TV demand in the fourth quarter. "Cost pressure continues as prices of core components, such as memory and LCD panels, rise," the company said. It gave no revenue figure for webOS or LG Ad Solutions.

Agents, interfaces and privacy controls

Walmart expanded what its shopping agent can see. On October 30 it added six capabilities to Sparky for US customers, including the ability to turn photos of handwritten lists into carts, a Shop to Light feature that pins a product on a store map and lights its shelf label, recipe generation with ingredients added to the cart, healthier swaps, and conversation in Spanish and French. "The holidays have a way of turning one shopping list into five," Walmart wrote. Product modules labelled "Sparky's Picks" appear in the examples, but Walmart did not say whether any are paid placements, which matters as Walmart Connect sells advertising across the same shopping journey.

Google wants agent replies to look less like text. A guide published on October 29 on the Google Developers Blog with CopilotKit shows how Google's A2UI turns AI agent replies into forms, maps and cards. A2UI is Google's open standard for describing an interface as data, and it travels to an app through CopilotKit's AG-UI event protocol. Agents can only assemble components the application has registered in advance, which Google presents as the core of its security model. "A2UI is a declarative data format rather than executable code," the A2UI team wrote. The guide gives no adoption figures, names no production deployment and does not mention advertising, consent or measurement.

The question of consent inside agents was addressed by researchers. Seven academics from Wesleyan University, UC San Diego, Stanford, Carnegie Mellon and Villanova audited 30 AI assistant and agent products from 18 companies and found that only 14 of 29 applicable products let users stop the sale or sharing of data for advertising. Only 6 of 30 let users opt out of human review. The preprint, posted to arXiv on October 22 and not yet peer reviewed, proposes a way to carry a Global Privacy Control style signal through the Model Context Protocol and Agent2Agent. "We note that there are no privacy preference-related fields in existing agentic protocols," the authors wrote. They also cautioned that their audit "captures the controls companies document, not whether they work as described."

LinkedIn's chief information security officer warned that AI is speeding up attacks. In a Pressroom post on October 30, Lea Kissner said LinkedIn had called a "Code Yellow" on information security earlier in 2026, archiving thousands of unused code repositories and rehearsing emergency fixes, and that the work let it respond quickly when several critical vulnerabilities surfaced in widely used technology the previous week. "We weren't responding to a breach or a single critical vulnerability," she wrote. "The gap between discovering a vulnerability and somebody attempting to exploit it is getting smaller." She offered no data for the claim, and did not say whether LinkedIn systems were exposed.

Google's developer community is being organised around the same agentic theme. A post on October 30 said DevFest 2026 expects almost 1 million attendees at more than 800 events in 115 countries between October 1 and December 31. "DevFest is uniquely built by the community, for the community," wrote Natalie McHugh, developer relations program manager, in the announcement. At the Lisbon event on November 28, 11 of 13 sessions name AI, Gemini, agents or related tools in their titles, by PPC Land's count.

Marketers fund what they doubt

A survey suggests the pressure to prove results is shaping where money goes. Funnel, a Stockholm marketing data company, and Ravn Research published "Playing defense" on October 29, based on 233 marketers and interviews with five agency leaders. 36% of in-house marketers kept funding a channel they believed was not working because its numbers looked too good to cut. Sixty-one per cent chose a metric because it told a better story, and only 9% described measurement that combines incrementality, marketing mix modelling and attribution. "Marketers are afraid of making mistakes. They're afraid of being blamed if a strategy doesn't work," said Natalia Hernandez, managing director of data at Brainlabs. Spencer Lian-Thornton of Mindgruve described the reflex: "Whenever there's uncertainty or pressure for in-quarter results, marketers tend to flock to low-funnel tactics." Funnel sponsored the research and did not disclose fieldwork dates, countries or weighting.

Testing tools for Google and Bing ads

Advertisers gained a new way to test creative in Performance Max. PPC News Feed reported that Google Ads has introduced A/B testing for Performance Max asset groups, letting advertisers compare different sets of assets within the same asset group, with control and treatment groups, a traffic split and a chosen success metric such as conversions or cost per conversion. Google's experiment guidance recommends running for at least four to six weeks. Thomas Eccel shared the interface in a LinkedIn post. Google has not announced the feature through its own channels, and availability by country or account type is unclear.

Bing, meanwhile, is testing a new layout for sitelinks. PPC News Feed reported that Bing is experimenting with "Menu" links in search ads, showing a "Menu" heading followed by a list of sitelinks beneath an ad's headline and description. Sachin Patel spotted the design, which has not been consistently replicated, suggesting a limited trial. Microsoft Advertising has not confirmed it.

What comes next

The coming weeks will test several of these threads. The midterm elections take place on November 3. France's per-gigabyte tax faces further readings before the finance bill can become law, with the government opposed. DevFest Lisbon takes place on November 28, and Meta's at-the-market equity programme begins in January 2027, when Google also plans its next Suncatcher milestones. Meta's own 2027 spending guidance, when it comes, will show whether S&P's forecast of more than $225 billion was too high, or whether the agency's negative outlook was only the first such warning.