Facebook Parent Meta (Meta) Tuesday announced that it would lay off another 10,000 workers. The move is part of CEO Mark Zuckerberg's so-called “Efficiency Year,” during which the company is cutting spending amid declining digital advertising revenue and rising interest rates.
But buried in Zuckerberg's statement about the layoffs was a clear message for both Silicon Valley and Wall Street: Artificial intelligence is now just as important to the company as the metaverse.
the reason? If Meta can build out its AI capabilities, it could find itself back in Wall Street's good graces, and earn the capital it needs to pursue its broader ambitions in the years to come.
Need proof of tricks? A quick look at Zuckerberg's Facebook post announcing the layoffs will give you an idea of how important AI is to the future of the company. Talking about how Meta is investing in future technologies, Zuckerberg said, “Our biggest investments are in advancing AI and building it into every single one of our products.”
And while he mentioned Meta's work on the Metaverse twice in his statement, it was only after talking about the firm's AI efforts.
“We do pioneering work in a wide range of advanced technologies and then turn them into inspiring products that improve people's lives,” Zuckerberg wrote.
“We [invest in] AI to help you creatively express yourself and discover new content, to provide a realistic sense of presence with the Metaverse, to create richer experiences with new media formats, with encryption to connect you in more and more ways to communicate privately, and with business tools to reach customers, create opportunities, and help grow the economy.”
Part of the reason for the AI love is the hype train around the topic started by OpenAI's ChatGPT, Microsoft (MSFT) Bing, and Google (GOOG, GOOGL) Bard. The other half of the equation, however, is Meta's need to continue competing with rival TikTok.
The company, which is facing existential problems of its own, including a possible ban by the Biden administration, made its bones through its AI-powered For You page that gives you a never-ending stream of addictive short videos. provides current. And Meta is working hard to make sure it can match those capabilities.
“One thing that is very clear is that AI and the Metaverse are front and center of Meta's long-term strategy,” Mike Proulx, Forrester VP and director of research, told Yahoo Finance. “But the issue remains here and now; There's only so much runway left to give the company.
Meta has been stung for massive investments in Zuckerberg's plan to turn the company into a Metaverse First business. This includes the research and development of everything from the headsets needed to power that vision to the software that runs them.
In 2021, Meta reports $10.1 billion loss From its Reality Labs business, which includes the company's metaverse efforts. In 2022, which increased to $ 13.7 billion,
The greater emphasis on AI, however, allows Meta to please investors while continuing to pump money into its broader ambitions. Especially since it is expected that as long as the metaverse is not a believable reality, it could happen anytime.
,[Zuckerberg is] Looking to invest in projects that can drive growth, Deepwater Asset Management managing partner Gene Munster wrote in a recent note.
“The NFT experiment is gone. More investments will be made in AI to improve Reels' recommendations and ad measurement tools, add large language models (LLMs) to messaging, and automate ad campaigns with creative content creation.” Will be done,” he said.
In other words. Meta is now the Metaverse and AI Company. at least for now.
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