Meta shares fell on Wednesday after investors reacted negatively to the company’s commitment to keep spending heavily on artificial intelligence (AI) even as profits declined. The company behind Instagram and Facebook said revenue rose 28% year on year between April and June, but profits fell 14%.
The share price dropped 11% after Meta’s quarterly results, which also showed the firm lifting its expected spending to between $130bn (£973m) and $145bn this year, mostly for AI projects. That is up from the $125bn it said just three months ago it planned to spend.
Why is Meta increasing AI spending?
Meta chief executive Mark Zuckerberg said the company’s AI spending was
"accelerating every part of our core business"and said Meta planned to begin selling the technology to other businesses. He said the company’s AI capabilities and models were increasing engagement on Instagram and Facebook and improving smaller businesses’ ability to create advertising.
Zuckerberg also said Meta was developing AI agents, or AI chatbots that act somewhat autonomously. Such agents
"will be the next wave of our product line in the months and years to come,"he said.
He added:
"Soon, we'll have agents that can work 24/7 on your behalf", Zuckerberg added during the call. "Great personal agents need to just work out of the box. I'm very excited about this and we will have more to share soon."
What is Meta planning to sell to other companies?
Meta is planning, for the first time, to sell AI models and computer tools to other firms. Zuckerberg said the first step is to make its Muse Spark AI model
"easier for companies to integrate".
He said:
"We expect to build a large business for large businesses,"and added that Meta has
"more coding and product tools on our roadmap."
Although Zuckerberg said the move would flex
"a different muscle than we've historically had", he argued the financial opportunity was too large to overlook. He said:
"It's not just about selling compute; it's the API services and the productivity services and I think there is a very, very large opportunity there and we're quite focused on that."
Meta’s latest results show a company still growing revenue quickly, but facing pressure from investors over the scale of its AI investment plans and the near-term impact on profits.
Key Facts
- Meta shares fell 11% on Wednesday after the company’s quarterly results.
- Revenue rose 28% between April and June from a year earlier, while profits fell 14%.
- Meta said it expects to spend between $130bn (£973m) and $145bn this year, mostly on AI projects.
- Mark Zuckerberg said Meta plans to sell AI models and computer tools to other businesses for the first time.
