Zuckerberg Predicts Meta’s Generative AI Will Take Years to Turn Profitable

The generative AI gold rush is here, and companies are investing heavily in the development of artificial intelligence technologies. However, while the potential for profits is vast, it may take some time before these investments start to pay off.

One company that is leading the charge in AI development is Meta, formerly known as Facebook. With a net income of over $12 billion and revenue of $36.5 billion in the last quarter alone, the company is already highly profitable. However, its revenue growth is expected to slow in the coming years. Despite this, Meta is spending more than ever on AI and the metaverse, showing its commitment to the future of AI technology.

During the first quarter earnings call, Meta CEO Mark Zuckerberg expressed optimism about the potential of AI and the metaverse. He compared the development of AI to the rollouts of previous features like Stories and Reels, stating that historically, investing in new experiences has been a good long-term investment for the company and its investors. However, he acknowledged that building the leading AI will be a larger undertaking, requiring several years of development.

Meta’s AI assistant, known as Meta AI, has already been widely adopted by millions of users since its recent release. However, the true test of its success will be whether people continue to use it frequently and if there is a demand for AI assistants in social media apps. Zuckerberg sees multiple ways to monetize the assistant, including business messaging, ads, paid content, and paid access to larger AI models and compute power. Additionally, AI can improve app engagement, leading to increased ad views and more valuable ads.

Interestingly, Meta’s approach differs from that of OpenAI, another leading AI company. OpenAI has so far resisted the advertising business model and instead focuses on subscriptions and enterprise solutions. In contrast, Meta is looking to leverage user data from its AI assistant to improve the quality of its ads and better understand user interests and purchasing behavior.

Furthermore, Zuckerberg expressed a shift in his thinking regarding the mainstream adoption of augmented reality (AR) glasses. Previously, he believed that full holographic displays were necessary for widespread adoption. However, he now believes that fashionable AI glasses without a display can also find a meaningful market.

In conclusion, Meta’s investment in AI and the metaverse demonstrates its commitment to the future of technology. While profits from these investments may take time to materialize, the company sees multiple opportunities for monetization and improvement in its advertising capabilities through the use of AI. Meta’s approach differs from that of OpenAI, as it embraces advertising as a potential revenue stream. Additionally, Zuckerberg’s shift in thinking regarding AR glasses showcases the company’s adaptability and willingness to explore new markets. Overall, Meta’s foray into AI and the metaverse positions the company as a prominent player in the ongoing generative AI gold rush.



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