Wall Street Investors Uneasy About Meta’s Multi-Billion-Dollar AI Plans
Wall Street investors are feeling uneasy about Meta’s multi-billion-dollar artificial intelligence (AI) plans, as the company’s stock fell 15% in early trading on Thursday. Despite CEO Mark Zuckerberg’s efforts to reassure investors during the tech giant’s quarterly earnings release, concerns remain about the company’s focus on AI over its core advertising activities.
Analysts are cautioning that while AI is important, spending needs to be targeted and aligned with a clear strategic view. Meta’s decision to increase its AI spending by $5 billion to develop new products for consumers, developers, businesses, and hardware manufacturers has raised eyebrows among investors.
With capital expenditures on AI and the metaverse-development division Reality Labs expected to reach $35 billion to $40 billion by the end of the year, some are questioning the return on investment for these ambitious projects. Zuckerberg, however, remains optimistic about the company’s AI capabilities and plans to invest significantly more in building advanced models and services.
This isn’t the first time Zuckerberg has asked for patience from investors as Meta embarks on large technology projects, such as Reality Labs, which incurred a $16 billion loss in 2023. Despite the uncertainties, industry experts are praising Meta’s latest AI assistant, Meta AI, powered by the advanced Meta Llama 3 model.
The features of Llama 3, including its large and small models, have the potential to shake up the AI landscape, offering faster inference times and the benefit of being open source. As Meta continues to push the boundaries of AI innovation, the company’s future direction and financial performance will be closely watched by Wall Street investors.
