Mark Zuckerberg’s AI hiring spree is costing a lot of money. His investors don’t care.
Meta’s stock price shot up over 10 percent on Wednesday after the company reported better-than-expected earnings. Revenue generated in the second quarter was $47.5 billion, up 22 percent from a year ago. Daily users across Facebook, Instagram, Threads, and WhatsApp grew to almost 3.5 billion. Meta also warned Wall Street that it would spend more on data centers and hiring next year. In response to all this, the company’s valuation increased by over $175 billion, or more than 12 Scale AI deals.
”Our business continues to perform very well, which enables us to invest heavily in our AI efforts,” Zuckerberg said during today’s earnings call. Meta’s cash cannon is now fully pointed at his new moonshot of achieving superintelligence, or as he puts it, AI that “surpasses human intelligence in every way.” He bragged about providing the richly compensated members of his new superintelligence lab “access to unparalleled compute” for training new models that will “push the next frontier in a year or so.”
Zuckerberg’s last moonshot was the metaverse, which came up only once at the very end of today’s earnings call. It’s too early to compare the two projects, but they share a key similarity: they need the kind of funding that only a company like Meta can provide.
Where AI differs from the metaverse, however, is that it appears to be already improving Meta’s ads business. A new AI model for delivering ads has driven approximately five percent more conversions on Facebook and three percent more conversions on Instagram, according to CFO Susan Li. Large language models are also starting to power how posts are ranked in feeds across the company’s apps, including Threads.
While Meta is still spending heavily on the metaverse (it’s on track to spend a total of $100 billion on its Reality Labs division this year), there’s no mistaking the fact that AI is officially Zuckerberg’s top priority. This time, though, he’s playing catch-up in a heated race, not trying to invent a new platform from scratch. The stakes are much higher, even if he’s playing the game with house money.
Read the full article here
