Meta AI Could Be ‘Most Used AI Assistant’ by Year End, Though Monetization May Be Years Out
Meta Platforms recently reported its second-quarter results, surpassing analysts’ expectations. During the earnings call, CEO Mark Zuckerberg provided an update on the company’s artificial intelligence (AI) developments and outlook. One of the highlights was Meta AI, the company’s AI assistant integrated into Facebook, Instagram, and WhatsApp. Zuckerberg stated that Meta AI is on track to become the most used AI assistant by the end of the year, surpassing competitors like Microsoft-backed OpenAI and Alphabet’s Google.
While Meta AI’s adoption is progressing well, monetization may take some time. Zuckerberg informed analysts that monetization is not expected for several years. This indicates that Meta is focused on establishing a strong user base and enhancing the capabilities of its AI assistant before exploring revenue-generating opportunities.
Investing in AI Now, To Avoid Falling Behind Later
Meta, along with other major tech companies, has significantly increased its spending on AI infrastructure. This has raised concerns about whether the costs associated with AI will pay off in the long run. In its second-quarter update, Meta raised the lower end of its capital expenditures (CapEx) outlook for the full year. The company now expects to invest between $37 billion and $40 billion in CapEx. Meta’s CFO, Susan Li, also mentioned that significant CapEx growth is expected in 2025.
Zuckerberg addressed the concerns by stating that he prefers to build capacity before it is needed rather than risk falling behind. He emphasized the importance of investing in infrastructure early, considering the long lead times required to establish new AI capabilities.
Zuckerberg Says He’s Bullish on Open-Source AI
Zuckerberg has long been a supporter of open-source AI. He believes that open-source tools are beneficial for developers, Meta, and the world as a whole. While Meta does not directly profit from promoting open-source tools, it helps the company gain influence and better compete with providers of closed AI models like OpenAI, Google, and Anthropic.
Meta recently unveiled Llama 3.1, its most capable open-source AI model to date. Zuckerberg revealed that the company is already working on Llama 4, aiming to make it the most advanced AI model in the industry next year. By leveraging open-source AI, Meta has saved billions of dollars from previous computing projects.
Leveraging AI To Boost Meta’s Advertising Business
Meta’s AI investments are expected to benefit its advertising business, which generates a significant portion of the company’s revenue. In the second quarter, Meta reported an increase in advertising revenue, surpassing analysts’ expectations. This was attributed to higher average prices per ad and increased ad impressions across Meta’s apps.
Zuckerberg highlighted that Meta’s AI offerings not only improve content recommendation engines to boost user engagement but also make advertising more effective. By optimizing ads using AI tools, Meta can determine which ads to show users, ultimately improving ad performance and the user experience.
Positive Market Response
Following the earnings call, Meta’s stock price rose over 7% to $510.25. Investors reacted positively to the company’s strong performance and the promising outlook for its AI developments. The market recognizes the potential of Meta AI to become the most widely used AI assistant and the long-term benefits of investing in AI infrastructure.
In conclusion, Meta Platforms’ earnings call provided valuable insights into the company’s AI developments and future prospects. Meta AI is poised to become a leading AI assistant, although monetization may take time. By investing in AI infrastructure early, Meta aims to stay ahead of the competition and leverage open-source AI to its advantage. Furthermore, Meta’s AI investments are expected to enhance its advertising business, driving revenue growth. The market responded positively to these updates, reflecting optimism about Meta’s AI initiatives and their potential impact on the company’s future success.
