How Meta plans to recoup its billions in AI investment - Sherwood News
2025 will be all about hitting a billion Meta AI users, then monetizing them. The year ahead for Meta is all about AI. But the year after that will be all about monetizing it. The company is currently training Llama 4, the next iteration of its large language model, which it expects to release this year. Even though Llama is a free, open-source product, it sits right at the center of Meta’s plans for growth. Unlike its competitors in the AI horserace, like OpenAI and Anthropic, Meta can pour tens of billions of profits from its other businesses into this effort (and the infrastructure needed to run it), and has lots of ways that it can turn the free product into a revenue firehose.
Monetizing AI Through Personalization
On yesterday’s Q4 earnings call, Meta CEO Mark Zuckerberg said: “We have a really exciting roadmap for this year with a unique vision focused on personalization. We believe that people don’t all want to use the same AI — people want their AI to be personalized to their context, their interests, their personality, their culture, and how they think about the world.” Anytime you hear the word “personalization” in a Big Tech product, that means it will be used for ads. None of the big AI players have integrated ads into their chatbot products, but if anyone is prepared for this, it’s Meta. Meta is an advertising company, after all.
Future Monetization Opportunities
For all of FY 2024, the company pulled in over $160 billion in ad revenue, growing 21% year over year. Zuckerberg regularly says that Meta’s pattern is to grow a product to 1 billion users, then monetize. But the “actual business opportunity for Meta AI and AI Studio and business agents and people interacting with these AIs” won’t show up until after 2025. If Meta’s plans for monetizing AI look anything like its current ad business, you might not even have to use Meta’s chatbot to help fuel the new business.
Challenges and Controversies
The Meta tracking “pixel” has turned billions of internet users into targets for Meta advertising, even if they aren’t users of Meta platforms. Dozens of lawsuits have been filed due to the ad technology’s misuse. Nobody really knows exactly how the “personalization” of AI services will be monetized, but after spending hundreds of billions to build all this fancy, city-sized AI infrastructure, Meta will surely seek a return on their investment.
Corporate Moves
Meta is looking into reincorporating away from Delaware and potentially to Texas, as reported by the Wall Street Journal. Most major American companies, including Meta, are incorporated in Delaware and have their corporate headquarters elsewhere.
Competitive Landscape
Following the DeepSeek news of last week, OpenAI seems to be going through different stages of envy. Bloomberg is reporting that the White House and the FBI are investigating DeepSeek to find out if they evaded export controls to acquire Nvidia GPUs. The AI world has been speculating about the methods used by DeepSeek, with accusations and counter-accusations flying among competitors.
Market Response and Trends
Meta has sold more than a million Meta Ray-Ban glasses in 2024, revealing figures for its face computers for the first time. Meanwhile, amidst the absence of TikTok on US app stores, rival platforms are seeing varying degrees of traffic increases and shifts in user behavior.
TikTok’s US rivals have been desperate to win over TikTokers in the evolving landscape of social media and AI competition.
