After changing its name to “Meta” and announcing its commitment to building the “metaverse” around a year and a half ago, the tech giant has now declared that the Meta Future Plans are developing artificial intelligence. This indicates a shift in their priorities towards AI advancement.
Mark Zuckerberg, the CEO of Meta, wrote a letter to his employees on Tuesday where he emphasized the company’s new focus on “efficiency.” He also shared that Meta plans to lay off 10,000 employees in the upcoming months. This decision follows years of investing heavily in areas like virtual reality without proven potential. Meta’s shift towards efficiency was announced during its quarterly earnings call last month.
Zuckerberg said Meta Future Plans will now prioritize streamlining projects and reducing expenses. While building the metaverse is important for the future of social connection, Meta will not spend most of its money there. Instead, the company’s main goal is to improve AI.
In a recent statement on Tuesday, Zuckerberg stated that their biggest investment is advancing AI and integrating it into their meta-future products. He explained how AI technology could help their app users communicate their thoughts better and find new happiness. Additionally, Zuckerberg mentioned that new AI tools could also be used to improve efficiency within the company by helping engineers write better code faster.
The CEO acknowledged that the world economy changed, competition increased, and their growth slowed significantly last year, which was a humbling experience for the company.
These statements were made at a time when the tech world is experiencing a heightened AI frenzy.
This was sparked by the release of ChatGPT, an AI model developed by Microsoft-backed OpenAI, in November last year. Although Meta (formerly Facebook) has been involved in AI research for years, ChatGPT quickly went viral due to its ability to generate human-like responses to user prompts, leading to an apparent AI arms race among tech companies.
Since then, Microsoft announced in February that it would incorporate the ChatGPT technology into its search engine, Bing. Google followed suit by unveiling its AI-powered tool, Bard, a day before Microsoft’s announcement. Meta also revealed last month that it would be creating a new product group to accelerate the development of its AI tools.
Future of metaverse:
According to Ali Mogharabi, a senior equity analyst at Morningstar who spoke to CNN, Zuckerberg’s comments about focusing on AI are positive. Mogharabi believes Meta Future Plans’ in AI can benefit product engineers and users, which will benefit the metaverse’s future. By incorporating AI features into its app lineup, users may spend more time engaged, leading to potential increases in advertising revenue. Mogharabi also suggests that investments in AI could apply to the entire metaverse project.
Mogharabi noted that Zuckerberg’s emphasis on investing in AI and using it to increase the company’s efficiency and profitability aligns with what shareholders and the market want to hear. Meta’s ambitions and expenses related to the metaverse had previously concerned many investors. In 2022, Meta’s “Reality Labs” division, which includes its metaverse initiatives, suffered losses of over $13.7 billion.
However, investors appear to welcome Zuckerberg’s shift in focus from the metaverse to productivity. Despite setbacks in 2022, Meta’s shares have risen by more than 50% since the beginning of the year.
According to Angelo Zino, a senior equity analyst at CFRA Research, the second round of layoffs at Meta confirms that Zuckerberg has completely changed the company’s narrative from one focused on growing the metaverse at any cost to one focused on efficiency.