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Meta’s long-term investment in generative AI may take years to yield profits

Meta CEO Mark Zuckerberg discusses the long-term investment in generative AI, expecting it to take years before it becomes profitable.

The race to leverage generative AI is in full swing, but Meta, formerly known as Facebook, warns that turning a profit from this technology will not be immediate.

During a recent earnings call, Meta CEO Mark Zuckerberg shared insights with investors about the company’s ambitious plans for its AI technologies, which have now been integrated across popular platforms such as Instagram, Facebook, and WhatsApp. Despite Meta’s robust earningsโ€”netting over US$12 billion in income from US$36.5 billion in revenue last quarterโ€”Zuckerberg stressed that revenue growth might slow as investments in AI and the metaverse ramp up.

“Historically, investing to build these new scaled experiences in our apps has been a very good long-term investment for us and for investors who have stuck with us,” Zuckerberg remarked. He likened the introduction of generative AI to earlier successful features like stories and reels. However, he acknowledged that AI represents a more significant challenge, one that could take several years to fully implement as a profitable venture.

Meta has already seen tens of millions of users engage with its new AI assistant since its widespread rollout. This initial popularity is a positive sign, but the true measure of success will be its sustained use and the extent to which it can attract a regular user base.

Zuckerberg outlined multiple strategies for monetizing the AI assistant, which is currently free. These include expanding business messaging, integrating advertisements or premium content into AI interactions, and offering access to more advanced AI models for a fee. Moreover, AI technology is enhancing user engagement across Meta’s apps, leading to increased ad views and more targeted, effective advertising.

“In the next year or so, we anticipate that the Meta AI could also enhance the quality of our ads by analysing how people use the assistant, which will give us deeper insights into their preferences and potential purchasing behaviours,” Zuckerberg explained. This strategy marks a departure from other AI pioneers like OpenAI, which have focused on subscription models and corporate services rather than advertising.

In addition to AI, Zuckerberg expressed optimism about Meta’s partnership with Ray-Ban on smart glasses. Despite lacking a display, the fashionable, AI-enhanced glasses have sold out in various styles and colours, demonstrating significant market demand.

“I used to think that AR glasses wouldnโ€™t really be a mainstream product until we had full holographic displays,” Zuckerberg concluded.

Meta’s journey into generative AI is set to be meticulous and possibly lengthy, but it is poised to reshape how the tech giant innovates and earns in the future.

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