Mark Zuckerberg Warns Meta's A.I. Bet May Take 'Years' to Pay Off ...
Meta (META) is heavily investing in A.I. infrastructure such as data centers and GPUs, with CEO Mark Zuckerberg cautioning investors that it may take a considerable amount of time for the company's A.I. bet to yield returns. During the April-June quarter, the social media giant recorded a 7 percent increase in total costs, largely driven by expenses related to A.I. On the recent earnings call, Zuckerberg mentioned that it could potentially be "years" before their generative A.I. business becomes profitable.
The positive news is that Meta's core advertising business is thriving, reporting a revenue of $39 billion for the quarter, marking a 22 percent increase from the previous year and surpassing Wall Street's expectations. Quarterly profit saw a significant surge of 73 percent to $14.47 billion. As a result, Meta shares experienced a 6 percent jump post-earnings announcement.
Exploring New Revenue Avenues
Meta's chief financial officer, Susan Li, shared during the call that they do not anticipate their generative A.I. products to be a significant revenue driver by 2024. However, they do foresee these products unlocking new revenue opportunities over time, ultimately leading to a substantial return on their investment. Meta has introduced various A.I. products, competing with tech giants like Google, Microsoft, and Amazon in the development of cutting-edge generative A.I. applications.
In a recent development, Meta unveiled Llama 3.1 along with AI Studio, offering Instagram creators the ability to generate A.I. avatars for interactive engagements with their audience. While the company previously introduced A.I. celebrity chatbots across its platforms, these were later discontinued due to low user engagement. Despite not yet monetizing these products, Meta's Ray-Ban Smart Glasses have shown promising performance, exceeding expectations as highlighted by Zuckerberg.
Future A.I. Initiatives
Looking ahead, Meta aims to enhance existing A.I. tools while introducing new features to bolster its A.I. capabilities. The company is exploring ways to leverage generative A.I. to enhance its core advertising business and is actively developing A.I. agents for enterprises to drive sales and cost-efficiency. Although select businesses are currently testing these agents, Meta has not disclosed a specific timeline for wider availability.
During the earnings call, Zuckerberg expressed his optimism about the immense potential of these A.I. advancements. Meta's relentless focus on advancing its A.I. capabilities signifies a strategic commitment to innovation and long-term growth in the evolving tech landscape.
