Mark Zuckerberg Lays Down How Meta Will Make Money From Its AI Investments
Mark Zuckerberg has outlined three strategies for Meta Platforms Inc. META to monetize its substantial investments in artificial intelligence (AI).
What Happened
Zuckerberg, during the March 2024 quarter earnings call, expressed his confidence in Meta’s AI capabilities, particularly with the launch of Llama 3, the company’s latest AI model. He stated that Meta will “invest significantly more over the coming years to build even more advanced models and the largest scale AI services in the world.”
Despite the substantial costs associated with this ambition, Meta plans to increase its capital expenditure for this year to $35 billion to $40 billion, primarily for AI investments. This announcement resulted in a 16% stock drop in after-hours trading.
Zuckerberg, however, is confident that Meta’s AI investments will yield significant profits in the future. He outlined three specific ways in which AI could become a “massive business” for Meta.
The first method involves companies paying Meta for generative AI tools, such as services supporting automated interactions with users and customers. This could become a reality within the next five years, according to Zuckerberg.
The second approach is to integrate ads or paid content into AI interactions. This aligns with Meta’s core business of selling digital advertising.
Why It Matters
Zuckerberg’s announcement comes after Meta announced plans to significantly increase its capital expenditure for AI investments. This move has raised concerns among investors, given the company’s history of overspending on new technologies, such as the Metaverse.
These strategies align with Meta’s recent AI initiatives, including the launch of its latest AI model, Llama 3, which has outperformed other AI models in benchmark tests.
Price Action: Meta stock closed 0.52% lower at $493.50 on Wednesday, according to Benzinga Pro.
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