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Zuckerberg wants to make Meta number one in AI
Mark Zuckerberg’s big AI plans bring Meta into greater competition with ChatGPT developer OpenAI and other tech heavyweights. photo
© Andrej Sokolow/dpa
Brilliant quarterly figures, big AI plans: But investors are causing the shares of the Facebook group Meta to collapse. Because Mark Zuckerberg says it could take years for the AI offensive to bear fruit.
Wall Street was shocked to hear such AI ambitions: the share price fell by more than twelve percent in early US trading on Thursday, even though the advertising business continued to run at full speed in the last quarter. Two and a half years after Zuckerberg renamed the company from Facebook to Meta to emphasize the focus on the loss-making virtual “Metaverse” worlds, the prospect of further upheaval seems to be bringing a sweat of fear to investors’ faces.
Zuckerberg is courting the trust of the stock market
Zuckerberg’s program speech in a conference call with analysts seemed like an attempt to gain an advance of trust from the stock market. He pointed out that the Facebook Group’s approach of first building services that are popular with users and only then thinking about making money has worked time and again. He sees business opportunities, among other things, in communication between companies and their customers on Meta platforms such as Facebook, Instagram and WhatsApp.
Zuckerberg also imagines “AI agents” that, unlike today’s chatbots, not only answer individual questions, but could also take on more complex tasks for users that require their own actions and research in the background.
Zuckerberg’s big AI plans bring the company into greater competition with ChatGPT developer OpenAI as well as other tech heavyweights such as Microsoft, Google and Amazon, all of which want to play a leading role in artificial intelligence. At the same time, Meta has a strategic advantage in the base of 3.24 billion users who recently accessed at least one of the group’s apps every day. The group must find scenarios that meaningfully integrate AI into their everyday lives.
Connected glasses as “the perfect device for AI assistants”
Since last week, buttons that activate the AI assistant have been appearing in meta apps in the USA and several other countries. Zuckerberg also has high hopes for the networked glasses with a camera, microphone and speakers developed together with Ray-Ban. For example, the AI in the glasses can answer questions about what a user is currently looking at. “Glasses are the perfect device for an AI assistant because they can see what you see and hear what you hear,” Zuckerberg said.
The Ray-Ban glasses were developed by the Reality Labs division, which also works on the “Metaverse” platform and headsets for displaying virtual reality (VR). In the meta balance sheet, Reality Labs are a chronic loss-maker. In the last quarter alone, the division posted operating red figures of $3.85 billion. That was slightly better than the operating loss of almost four billion dollars in the same quarter of the previous year.
Zuckerberg now argued that since the Reality Labs also enriched other services with the AI in Ray-Ban glasses, for example, a better way had to be found to present their contribution. For a while there was grumbling among investors about the division’s high losses for years. But Zuckerberg stuck to it adamantly – and when the advertising business picked up again after a brief dip, the critics also fell silent.
Outlook alarms investors
Last quarter, advertising dollars flowed back into meta coffers. Sales rose 27 percent year-on-year to $36.45 billion. The profit more than doubled to around 12.4 billion dollars (11.6 billion euros).
However, investors found a downer in the outlook: Meta predicted sales of between $36.5 and $39 billion for the current quarter. Analysts on average had expected 38.4 billion. In addition, the costs of the AI offensive are already becoming apparent. Meta now puts the range for spending this year at $96 to $99 billion. The previous forecast was between $94 and $99 billion.