Meta's Energy Dilemma: Powering the AI Future

Name: Meta's Energy Dilemma: Powering the AI Future (English version)
SKU: 725457

Yao, Dennis; Calic, Goran; Wu, Andy

Product #:725457

Supplier:Harvard Business Impact

Discipline:Strategy

Setting:2025

Details:Case (PDF) • 29 pages • 2025-04-25 (Rev: 2025-11-07)

Subjects:

Strategy Information systems

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In 2024, Meta Platforms faced a strategic crossroads. The company's AI capabilities were surging, powering ad revenue, user engagement, and product innovation across Facebook, Instagram, WhatsApp, and its new virtual assistant Meta AI, but so too were its energy demands. A failed attempt to build a nuclear-powered data center, blocked by environmental regulators, left Meta without a clear path to securing the reliable, low-carbon electricity required to fuel its next-generation AI models. While competitors like Microsoft and Google were locking in long-term nuclear deals, Meta was forced to reassess its options. Should it double down on nuclear energy, invest further in renewables and storage, or consider outsourcing its AI infrastructure entirely? With AI energy consumption projected to grow exponentially, Meta's leadership had to weigh the cost, speed, regulatory, and reputational trade-offs of each path. This case explores how Meta's decision would shape not only its competitive position in AI, but also the energy future of Big Tech.

Learning Objectives

This case teaches students how to incorporate strategic timing into decision-making. Students will examine how a company like Meta must not only choose the right energy technology to support its AI ambitions, but also manage when to commit to that technology. The case invites discussion around two core timing challenges: (1) predicting when the market and infrastructure will be ready for a new technology, and (2) conveying credible deadlines to suppliers and partners to ensure key resources, like energy, arrive when needed. Through the lens of Meta's AI and energy dilemma, students learn how setting and managing timelines can be a powerful source of strategic advantage.