In the recent Q2 Earnings Call, Meta CEO Mark Zuckerberg reaffirmed the company’s long-term commitment to its metaverse vision and artificial intelligence (AI) technologies. Speaking about the future, Zuckerberg stated, “The two technological waves that we’re riding are AI in the near term and the metaverse over the longer term.”
Zuckerberg went on to highlight the significant strides Meta has made in AI investments. He mentioned that the billions of dollars spent on AI infrastructure have paid off, resulting in improved ranking and recommendation systems, increased engagement, and enhanced monetization.
It is worth noting that during the earnings call, there was no specific mention of cryptocurrency, Web3, or NFTs. This indicates that Meta’s current focus lies in the intersection of AI and the metaverse, rather than previous ventures involving blockchain-related products like NFTs or tokens. In fact, Meta previously scrapped its NFT plans earlier this year to concentrate on other areas of the business.
Discussing Meta’s augmented and virtual reality division, Reality Labs, CFO Susan Li addressed the financial aspects. While Reality Labs generated $276 million in Q2 revenue, representing a 39% decrease primarily due to lower Quest 2 sales, the division’s expenses amounted to a significant $4 billion. Despite an operating loss of $3.7 billion, Zuckerberg remains optimistic about Reality Labs’ role in Meta’s long-term strategy and sees it as a significant opportunity.
To mitigate financial challenges, Meta is working on solving technical problems and scaling the adoption of current products. Li emphasized that the investment in research and development for overcoming these challenges is driving growth and enabling Meta’s vision in the long run.
Additionally, Meta is developing new products using an AI system called Llama. Zuckerberg mentioned that these tools will enhance user experiences across Meta’s services. These AI-powered products aim to improve mobile apps and the metaverse, helping users create immersive worlds with avatars and objects.
Zuckerberg expressed Meta’s continued commitment to AI and the metaverse, highlighting that both areas have been parallel priorities for the company for many years and are overlapping and complementary to each other.
On the financial side, Li outlined Meta’s investment philosophy, emphasizing their focus on investing in significant opportunities ahead. While efficiency measures have been taken, Meta remains committed to prioritizing and shifting resources towards AI and the metaverse. Potential drivers of expense growth in 2024 include higher infrastructure-related costs, increased payroll expenses for technical roles, and substantial operating losses in Reality Labs due to ongoing product development in AR/VR and ecosystem expansion.
In summary, despite financial and technical challenges, Meta’s dedication to the metaverse and AI remains unwavering. The company sees these two areas as the primary focus for future growth and will continue to invest heavily in them, regardless of the current economic circumstances.