Meta, the company that owns Facebook, Instagram, and is looking to be one of the key forces behind an AI-driven future, has seen its share price plummet by up to 11% following its most recent quarterly financial results. Revenue for the company was up by 28% year-over-year, but when it comes to profit, it's a different story, as they are down 14%.
The social media giant is looking to spend anywhere between $130bn to $145 billion this year, mostly on AI infrastructure. This is up from the $125 billion it said it was going to spend at the end of the last quarter. Mark Zuckerberg, Meta's chief executive, said that AI will be "accelerating every part of our core business." Soon, he thinks Meta will be able to sell its AI to other companies for profit.
Chief financial officer Susan Li believes that by 2028, the profits from AI will help drive returns. Mike Proulx, an analyst at Forrester, believes that Meta may be repeating past mistakes with its AI spending. As per BBC News, he said: "There's a bit of similarity to Meta's metaverse missteps in that Meta is once again spending ahead of proven product demand."
Zuckerberg is convinced the gamble will pay off. "I get that this is a big bet across the industry. My personal bet is that the people who invest in this will feel very good and be rewarded over time."
It's clear not every investor agrees, but big tech is still betting heavily on AI being our future in almost every industry.
