Mark Zuckerberg’s Meta has announced plans for $95bn (£71bn) of fundraising to cover its AI expenditure, even as Elon Musk warned that funding for smaller players in the sector was drying up.

The owner of Facebook, Instagram and WhatsApp is a leading investor in AI and is ploughing multibillion-dollar sums into datacentres, the central nervous systems of the technology.

Meta’s announcement on Monday came after Musk added to the pressure on “neocloud” datacentre providers – which lease computing power to AI companies – by saying the sector faced “death and consolidation” amid concerns over the sustainability of their funding.

The Meta fundraising will come in two parts. In the first, the company plans to raise $35bn through new “underwritten public offerings” – a sale of company stock. This has some big-name backers, with chipmakers Nvidia, AMD and Broadcom all showing interest, Meta said.…