Meta’s AI Bill Soars—but So Do Its Profits
Profits Up, AI Spending Surges
Meta beat Wall Street’s expectations this quarter with a stunning 27% rise in revenue, hitting $36.5 billion, and net income more than doubling to $11.6 billion year-over-year. But this strong performance came alongside eye-popping investments in AI: capital expenditures rose nearly 71% from last year, reaching $6.7 billion. CEO Mark Zuckerberg emphasized that Meta’s aggressive AI push is far from over, with yearly investment expected to hit up to $40 billion in 2024. Despite soaring costs, investors are upbeat—as long as growth keeps pace.
Zuckerberg’s Vision: An AI-Centric Meta
Zuckerberg laid out bold ambitions during the earnings call, predicting Meta will build “the largest scale AI infrastructure in the world.” This includes ramping up GPU acquisitions and infrastructure to support advanced models like Meta’s Llama and future consumer-facing AI agents across Instagram, Facebook and WhatsApp. The company recently debuted Meta AI, its flagship assistant, hinting at deeper AI integration across its platforms. With Snapchat and TikTok already exploring similar territory, Meta is racing to lead the next wave of consumer AI engagement.
Reality Labs Still Bleeds, But Threads and Reels Show Potential
Meta’s metaverse division, Reality Labs, continued to hemorrhage money—reporting a quarterly loss of $3.85 billion—but the company remains committed to long-term AR/VR bets. Meanwhile, newer ventures like Threads are gaining traction, helping diversify Meta’s future beyond ads. Reels monetization now nears break-even globally, showing promise in Meta’s battle for attention against TikTok. While Meta’s AI bet steals the spotlight, strategic side bets are quietly laying groundwork for what’s next.
