Brendan Smilalowski/AFP via Getty, Tyler Le/BI
- Mark Zuckerberg has become "more optimistic and ambitious" about Meta's ability to win in AI.
- The Meta CEO now plans to spend about $40 billion this year, largely on AI investments.
- He sees three ways AI can become a "massive business" for Meta in the next few years.
Mark Zuckerberg is now convinced that Meta is a top artificial-intelligence company, and he has even laid out how the technology will become a significant source of profit in the years ahead.
With the recent release of Llama 3, Meta's latest AI model, Zuckerberg said he became "more optimistic and ambitious on AI" and his company's ability to deliver on the tech.
He made it clear during a Wednesday earnings call with analysts that he intended to "invest significantly more over the coming years to build even more advanced models and the largest-scale AI services in the world."
"With the latest models, we're not just building good AI models that are capable of building some new good social and commerce products," the CEO told analysts. "I actually think we're in a place where we've shown that we can build leading models and be the leading AI company in the world. And that opens up a lot of additional opportunities beyond just the ones that are the most obvious for us."
Heavy spending again
Such ambition doesn't come cheap. Meta increased its guidance on capital expenditure for this year, saying it now planned to spend between $35 billion and $40 billion, largely on AI investments. Its stock slumped 16% in after-hours trading.
The last time Zuckerberg got excited about a new technology — the metaverse — Meta spent wildly and freaked investors out. The stock collapsed and didn't recover until the company embarked on a "year of efficiency" marked by mass layoffs and a more business-minded CEO.
Zuckerberg on Wednesday made a concerted effort to head off Wall Street panic that his new AI enthusiasm is lacking in business acumen.
He said he saw "several ways" generative AI could make money and laid out three specific paths to this becoming "a massive business" for Meta. Although he warned that getting there was a "long-term" prospect.
'Business messaging'
One of the ways AI can make money is by building up "business messaging" so that companies pay Meta for generative-AI tools, such as services that support automated interactions with users and customers. Zuckerberg envisions Meta's AI moving beyond just being a chatbot and becoming an AI "agent" that handles more complex tasks and processes multiple queries to solve user problems instead of coming back instantly with rote answers.
Zuckerberg said revenue from AI business messaging was "one of the nearer-term opportunities." While it may not become a reality this year, he said it was less than five years away. He explained that the immediate goal on this front was "getting many hundreds of millions or billions of people to use Meta AI as a core part of what they do."
Ads appearing in AI interactions
Another way generative AI could make money for Meta is by "introducing ads or paid content into AI interactions," as Zuckerberg said. Although brands and companies paying for products to show up in generative-AI results is not yet the standard for AI chatbots, Meta's entire business is effectively driven by selling digital advertising. Inserting ads into its social and messaging products is at the core of Meta as a company.
AI is already being more widely deployed by Meta in its newer "unconnected content" algorithm for social-media content recommendations, which Zuckerberg said was leading to more app engagement. That, in turn, leads to more people seeing more ads. He said that 30% of the content that Facebook users were seeing was recommended by AI, and the same applied to 50% of the content seen by Instagram users.
Selling access to AI models
A third distinct way Meta may make money from AI is by selling access to models as they get larger. "Enabling people to pay to use bigger AI models and access more compute," as Zuckerberg put it on Wednesday.
Right now, Llama 3 and Meta's other large language models are freely available to users and companies below a certain size threshold. Charging for access may be a move away from Meta's "open source" approach.
"So if the technology and products evolve in the way that we hope, each of those will unlock massive amounts of value for people and business for us over time," Zuckerberg said, adding, "I think it makes sense to go for it, and we're going to."