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Payoff for Meta's big bet on AI will take time, Zuckerberg warns

Apr 24, 2024 - businessinsider.com
Meta's stock fell by approximately 16% after trading hours despite better-than-expected Q1 results, due to a lackluster revenue forecast and significant investments in AI. The company reported a 27% YoY increase with $36.46 billion in sales for Q1, surpassing analysts' predictions. However, Meta's revenue forecast for Q2 is expected to be between $36.5 billion and $39 billion, lower than analysts' estimate of $38.24 billion. The company also announced that it expects capital expenditures for 2024 to be between $35 billion and $40 billion, higher than the expected $30 billion to $37 billion, as it continues to invest in AI infrastructure.

CEO Mark Zuckerberg stated that the company's stock volatility is typical for any new project or feature that isn't immediately generating revenue, and cautioned that returns from AI investments will take time. He also mentioned that Meta's latest version of its chatbot, Llama 3, will power the company's new AI assistant, Meta AI, which will be integrated into many of Meta's products, including Instagram and Facebook. Despite Meta's claims that Llama 3 is the "most capable" open source model, it has yet to outperform ChatGPT 4, OpenAI's language model released last year.

Key takeaways:

  • Meta's stock fell by 16% despite better-than-expected Q1 results, due to a lackluster revenue forecast and heavy investments in AI.
  • The company reported a 27% year-over-year increase with $36.46 billion in sales for Q1, surpassing analysts' forecasts.
  • CEO Mark Zuckerberg stated that making money off of AI will take time and that the company's stock volatility is expected for any new project that isn't immediately generating revenue.
  • Meta launched its latest version of its chatbot, Llama 3, which will power the company's new AI assistant, Meta AI, to be integrated into many of Meta's products, including Instagram and Facebook.
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