Meta and Tesla Earnings Diverge as AI Spending Hits Cash Flow

Meta's Q3 revenue hit a record $64.6B, but costs, Reality Labs losses and AI capex pushed free cash flow negative for the first time since its 2012 IPO.
Tesla's Q3 revenue was flat and net income fell 43%, with free cash flow down 62% as capex jumped 110%.
Underdog released Bark 3.0, a 163 MB open-source speech model that beat Parakeet and Whisper large-v3 on AMI word error rate.
Raoul Pal argues hyperscaler profits are growing while headcount stays flat, and cites Ken Griffin calling AI "almost certainly" a bubble.
Clifford Asness pushed back on wealth-tax and "the rich don't pay taxes" claims, citing CBO data and warning about California's proposed billionaire tax.

Meta reported Q3 revenue up 26% to a record $64.6B, while costs and expenses rose 68% to a record $51.6B, including $9.9B tied to an $18.6B teen mental-health/social-media settlement. Operating income fell 37% to $13B and the operating margin dropped from 40% to 20%. Its Reality Labs unit lost another $4.1B in the quarter, bringing cumulative losses since 2020 to $92B; the author said he had never seen a public company burn cash at that scale. Free cash flow was -$2.1B, the first negative quarter since its 2012 IPO, as AI infrastructure spending rose 80% to $34.9B, exceeding $32.8B in operating cash flow — via 1 2 3 4 5 6
Tesla posted Q3 revenue of $28B, flat year over year, with automotive revenue down 3%. Net income fell 43% to $787M, the operating margin dropped from 5.8% to 2.6%, and free cash flow fell 62% to $1.5B as capex jumped 110% to $4.7B — via 1 2

Underdog released the Bark 3.0 speech model: a 163 MB download with a 7.82% word error rate on AMI meeting recordings, versus 9.42% for NVIDIA Parakeet and 13.63% for OpenAI Whisper large-v3. It transcribes one minute of audio in under 0.25 seconds on a MacBook, runs on laptops and phones, and is released free under CC-BY 4.0 — via 1
Raoul Pal cited Amazon as an example: revenue up 53% since 2021 with headcount roughly unchanged, which he called a productivity gain, adding that hyperscaler headcount has been flat for about three years while profits grew exponentially. He called this "The New Macro" and argued current metrics are wrong, with intelligence costs falling 10x a year and gains flowing to margins rather than employment. He also cited Ken Griffin saying AI is "almost certainly" a bubble and that firms struggle to convert AI spending into productivity, while Griffin remains bullish long term — via 1
Separately, forwarded posts described Opus 5.5 being used to make "P(doom)"-themed music videos, including a five-minute classical piece written entirely in code and rendered frame by frame with Claude Code, with no image or video generation models used and source code published. One reposter said they are not a music producer or director but completed such work with Suno v6 and Opus 5.5, and another said Opus 5.5's one-shot performance led them to "seriously raise" their P(doom) — via 1 2 3 4

Clifford Asness cited CBO 2022 data showing the bottom 20% paid an average federal tax rate of 1.4%, the top 1% paid 31.5% and bore 27% of all federal taxes, and the top 20% bore 70%, arguing this rebuts claims that the rich don't pay taxes. On California's proposed one-time retroactive 5% wealth tax on billionaires, he questioned why the wealthy would leave permanently if the tax were truly one-time, and criticized economist Gabriel Zucman — via 1 2 3 4 5
Liz Ann Sonders reported US retirement assets of $51.2T as of Q2 2026, with IRAs the largest category at $19.1T. A National Institute on Retirement Security survey found 41% of non-retired Americans say debt prevents them from saving more for retirement and 39% cite high housing costs. Mortgage applications fell 5.3% for a seventh straight weekly decline despite slightly lower rates, and initial jobless claims fell to 194,000 while continuing claims rose to 1.728M — via 1 2 3 4
Charlie Bilello relayed an argument that the US government's problem is spending rather than revenue: tax revenue grew 65% over the past decade while spending grew 92%, with both parties aligned on overspending. He also noted Turkey's sixth rate cut of the cycle, a 100 bp cut to 36% — via 1 2

Meb Faber said Cambria Funds, which he co-founded, turns 20 next month, with assets growing from $2B to $5B, and acknowledged criticism including claims its products are "backtest catnip" and that it over-trades into lagging overseas value stocks at fees above 60 bps. He argued most institutions will underperform low-cost endowment-style ETFs because FOMO pushes them into private markets plus advisor fees and 2/20 charges, and he disputed calls to ban buybacks, predicting CEOs would respond with higher dividends, special dividends, more M&A, cash hoarding, debt repayment or take-privates — via 1 2 3 4
Jason cited TWiST content in which Sam Lessin said about 1% of Slow Ventures investments are fraud and argued seed portfolios without any fraud may not be creative enough, with diligence scaled to check size — light for $25K–$100K checks and non-negotiable at $100M. Jason also said cybersecurity is becoming the top issue after high-severity PHP and Node.js vulnerabilities, calling for more white hats and more tokens with unrestricted access to frontier models — via 1 2 3
Elad Gil relayed cases of people using AI and self-developed therapies against cancer, including GitLab founder @sytses developing more than 10 personalized therapies for bone cancer, and @kevinace, with stage 4 lung cancer, designing a vaccine and paying $300K out of pocket after his first drug failed at 18 months — via 1

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