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Meta’s AI Spending Plans Leave Investors Unnerved

Apr 25, 2024 - pymnts.com
Meta's stock fell by 15% amid investor concerns over the company's multi-billion-dollar artificial intelligence (AI) plans. Despite reassurances from CEO Mark Zuckerberg, concerns persist over the company's focus on AI at the expense of its core advertising activities. Meta plans to spend $5 billion more than initially planned on new AI products, with capital expenditures on AI and metaverse-development division Reality Labs expected to reach $35-40 billion by year-end.

Zuckerberg highlighted the company's AI advancements, including the latest version of its AI assistant, Meta AI, powered by its large language model, Meta Llama 3. However, past technology projects, such as Reality Labs, have resulted in significant losses, causing investor unease. Industry experts have praised Llama 3's versatility and open-source nature, which allows for cost-effective deployment on enterprise infrastructure.

Key takeaways:

  • Meta's stock fell 15% despite CEO Mark Zuckerberg's reassurances about the company's AI plans, causing unease among Wall Street investors.
  • Meta plans to spend $5 billion more than originally planned on AI products for consumers, developers, businesses, and hardware manufacturers.
  • Zuckerberg introduced the latest version of its AI assistant, Meta AI, powered by the large language model Meta Llama 3, and expressed confidence in the company's ability to build leading AI models and services.
  • Despite the potential of Meta's AI, there are concerns about the company's focus on its core advertising activities, with analysts suggesting that spending needs to be targeted and in line with a clear strategic view.
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