On Wednesday, Mark Zuckerberg revealed his ambitious plans to invest billions of dollars in artificial intelligence over the next few years. His message to Meta’s shareholders during the earnings call was to expect some bumpiness and keep their cool.
Mark Zuckerberg is ambitious about Meta’s AI ability
Zuckerberg is now more optimistic about his company’s ability to build more capable AI models after the release of Llama 3, which is Meta’s latest model. He said ‘it makes sense’ to go for heavier investments to build more advanced generative AI models and AI services that are going to be at a scale that will be the largest in the world. He said,
“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.”
He also told analysts that his company is not only building better models for developing social and e-commerce products, but they are looking to be the world’s top AI firm. But such high ambitions cost money, so that may not be taken well by investors. Because when the last time Zuckerberg spent big funds on metaverse that panicked investors.
His recent announcement also reflected on the company’s stock, which fell nearly 16% in the hours after he shared his investment plans. Zuckerberg said that historically, the company has seen stock volatility at times when they invested in product development and scaling but were not monetizing.
Where will the money go?
Meta also revealed its capital expenditure plans for AI and said that the spend will be somewhere between $34 billion to $40 billion. Zuckerberg tried to convince Wall Street and reduce the panic as he pointed out that investors know the opportunity and should wait. He also laid out some strategies to make money with generative AI and to develop them as big business for Meta. But he also warned that it will take time, likely several years, according to him.
One avenue to generate business, he pointed out, is to provide AI tools to other businesses, which could help them in customer interaction. One way to do this is by evolving Meta’s AI from just a chatbot to an AI agent that will be able to handle more detailed and complex workloads. This could be an option that they can utilize early for revenue generation, he said.
Meta is also looking to introduce ads in AI interactions or even paid content by companies and brands. Though this is not yet the standard for chatbots to show paid content in their answers, but this might change in the future as Meta’s business is primarily selling digital advertisements on its user facing apps. And the company has already deployed AI in its social media content recommendations.
At the moment, Meta’s AI services are free to use, but as the models become larger and more specialized, people and businesses can pay for them to adopt for their commercial needs, as this will provide access to more computing power. Alphabet, the mother company of Google, is also investing big sums in AI development in the coming years, and Microsoft also plans to invest $100 billion to build a data center for AI development with its partner OpenAI, which is already enjoying strong backing from Microsoft.
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