The generative artificial intelligence rush is happening but don’t expect profits in the near future.
Mark Zuckerberg, the CEO of Meta Platforms, during the company’s first-quarter earnings call, said he expects to see a multiyear investment cycle before the company’s AI-related products will scale into profitable services.
His statement comes days after the company stepped up its battle with OpenAI and Google with the release of Llama 3, its latest large-language model.
Meta’s earnings show revenues at the company — its platforms include Facebook, Instagram and WhatsApp — increased 27 per cent to $36.5 billion in the first three months of 2024 or slightly ahead of analyst expectations of $36.2 billion.
Investors did not warm to Zuckerberg’s focus on AI and the company’s shares tumbled, wiping out nearly $200 billion in market value. It’s a sharp reversal for a stock that has made substantial gains this year. Going forward, the company will continue to spend more than ever on AI and the metaverse.
“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 said.
“And the initial signs are quite positive here, too,” he added.
