Facebook parent company Meta (META) said on Tuesday that it will lay off an additional 10,000 staff. The action is a part of CEO Mark Zuckerberg’s so-called “Year of Efficiency,” during which the business is reducing spending as interest rates are rising and digital advertising revenue is declining.
But hidden in Zuckerberg’s comments on the layoffs was a clear message to both Silicon Valley and Wall Street: Artificial Intelligence is now as vital to the firm as the metaverse.
The cause? If Meta can develop its AI capabilities, it may be able to win back Wall Street’s favour and secure the funding it needs to realize its long-term metaverse goals.
Require evidence of the transfer? Just by taking a brief glance at Zuckerberg’s Facebook post announcing the layoffs, you can realize just how crucial AI is to the future of the business. Zuckerberg said, “Our single largest investment is in improving AI and putting it into every one of our products” when discussing how Meta is making investments in emerging technologies.
We [invest in] AI to help you express yourself creatively and discover new content, the metaverse to give you a realistic sense of presence, new media formats to create richer experiences, encryption to let you communicate privately in more and more ways, and business tools to help reach customers, create opportunities, and grow the economy.
Nevertheless, he only referenced Meta’s work on the metaverse twice in his statement after discussing the company’s AI initiatives. We do leading work across a wide spectrum of innovative technology and then distill that into inspiring products that improve people’s lives.
The hype train surrounding AI, which was initiated by OpenAI’s ChatGPT, Microsoft’s (MSFT) Bing, and Google’s (GOOG, GOOGL) Bard, is one of the factors contributing to its popularity. Yet Meta’s need to keep going up against rival TikTok is the other side of the equation.
The For You page, which is powered by AI and provides you with an endless stream of captivating short movies, is how that company, which is dealing with its own existential issues and may be banned by the Biden administration, made its money. And Meta is putting a lot of effort into making sure it can match their abilities.
One thing is undeniably clear: AI and the metaverse are at the forefront of Meta’s long-term plan, according to Mike Proulx, vice president and research director at Forrester. There is, however, still a problem in the present because the corporation only has so much time left to deliver. Because of its significant financial commitments to Zuckerberg’s aim to transform Meta into a metaverse-first corporation, the company has suffered. That covers the investigation and creation of everything, from the software that will power the apps to the headsets required to power the vision.
The company’s metaverse initiatives are housed in Reality Labs, which generated a $10.1 billion loss for Meta in 2021. It increased to $13.7 billion in 2022. Yet, putting more of an emphasis on AI enables Meta to please investors while still investing money on its plans for the metaverse. Particularly considering that, if ever, it will be years before the metaverse is a bankable reality. Mark Zuckerberg is seeking to invest in ventures that will promote growth.
“The NFT experiment is no more. In order to enhance Reels suggestions and advertisement measuring tools, add large language model (LLM) features to messaging, and automate ad campaigns with creative content development, more investment will be made in AI, the executive stated.