New Wine, Old Bottle: Meta is keen on bolstering AI capabilities, wants to ‘introduce AI to billions’

Meta, the parent company of Facebook, declared a $5.7 billion profit in the first quarter of this year, exceeding expectations amid a significant wave of cost-cutting and layoffs. According to an earnings report, the profit came from revenue of $28.6 billion and the number of people using Facebook every month increased to just shy of three billion.

“We had a good quarter and our community continues to grow,” said Mark Zuckerberg, Meta founder and CEO. We’re also becoming more efficient so that we can build better products faster and put ourselves in a stronger position to deliver on our long-term vision,” he said.

Also read: Meta employees call out Mark Zuckerberg for paying fat bonuses to execs during mass layoffs

Good profits marred by brutal layoffs
Zuckerberg, who has declared 2023 the “year of efficiency,” has also stated that the artificial intelligence deployed at Meta is “driving good results” across the company. Meta has adopted the most extreme approach to downsizing its employment among US large tech corporations, shedding about a quarter of its worldwide workforce, or more than 20,000 people, in only a few months. In the hours following the announcement of the results statistics, Meta shares rose over 10 per cent to $239.

The amount of ads seen across Meta’s “family of apps,” which includes Instagram, grew 26 percent year on year, but the average price per ad fell. According to the corporation, the number of employees at the end of March was 77,114, with additional layoffs planned.

Also read: Tech Layoffs: Meta starts laying people off again, this time from core engineering teams

Meta had a difficult 2022 because of a deteriorating economic situation, which prompted advertisers to cut back on marketing, and Apple’s data privacy rules, which limited ad personalisation. Last year, according to Zuckerberg, was a “humbling wake-up call,” and it would be prudent to “prepare ourselves for the possibility that this new economic reality will continue for many years.”

Was the Metaverse a wrong bet?
The corporation is also under fire for betting big on the metaverse, a virtual reality environment that Meta hopes will be the next frontier online. This has so far proven to be a disastrous gamble, with users dissatisfied with the technology and artificial intelligence, as exemplified by Microsoft-backed ChatGPT capturing the spotlight.

Meta therefore now sees “an opportunity to introduce AI agents to billions of people in ways that will be useful and meaningful,” CEO Mark Zuckerberg said today in a letter to investors.

Also read: Meta’s Horizon Worlds Metaverse app is so bad, it has to ‘force its employees’ to use it

While he was vague about how Meta will incorporate generative AI into its apps, Zuckerberg provided the most detailed preview yet during the company’s first-quarter earnings call, when it reported $28.6 billion in revenue and a record 2 billion daily users of the Facebook app, exceeding Wall Street’s expectations. Meta’s earnings for the quarter was $5.7 billion, a 24 per cent decline from the same period the previous year.

“We’re exploring chat experiences in WhatsApp and Messenger, visual creation tools for posts in Facebook and Instagram and ads, and over time, video and multi-modal experiences as well,” Zuckerberg said during the results conference. 

“I anticipate that these tools will be useful to everyone, from ordinary people to creators to businesses.” For example, I anticipate that once we perfect that experience, there will be a lot of interest in AI bots for business communications and customer service. This will eventually extend to our work on the metaverse, where users will be able to construct avatars, things, worlds, and programming to connect them all.”

Betting big on AI
With the distraction of the corporate rebranding and Zuckerberg’s concentration on the metaverse, Meta originally dragged its heels on constructing the infrastructure required to enable these types of AI capabilities, causing it to spend billions of dollars on data centre rehauling in recent quarters. Today, Zuckerberg said that “we are no longer behind in building our AI infrastructure” and teased the introduction of generative AI products in the coming months.

The exceptional success of OpenAI’s ChatGPT has elevated generative AI to the forefront of technology, with Google, Meta, and smaller businesses like as Snap rushing to develop rival applications. While Meta offered an AI language model called LLaMA to academics earlier this year, nothing like ChatGPT has been disclosed. 

According to Zuckerberg, while Meta is moving to AI like the rest of the business, it isn’t abandoning the metaverse. He said that the “narrative that has developed that Meta is moving away from the metaverse” is “not accurate,” citing the upcoming release of the new Quest VR device later this year as evidence. Meta’s Reality Labs segment revealed a $4 billion net loss in the fourth quarter, and the firm anticipates “operating losses to increase year over year in 2023.”

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