Meta's AI spending spree is starting to give investors an ulcer. Zoom in: The Facebook and Instagram owner's stock plunged more than 10% today after the company warned Wall Street that it could take years for its big bets to pay off.
Key Takeaways Meta shares tumbled over 10% Thursday, a day after the company said it expects higher expenses to invest in artificial intelligence (AI), but analysts suggested it could help Meta become an long-term AI leader.
Meta ( META) shares have fallen the most in more than two years and look set to lop around $170 billion from its market value. The reason: CEO Mark Zuckerberg warned that the social-media group's would transition from a "year of efficiency" to a "multiyear investment cycle" to power its AI ambitions.
Key Takeaways Increasing spending on AI at tech companies is in focus after Meta unsettled the market with its higher capex for 2024.Five of the biggest tech companies are expected to spend $199 billion in capital expenses this year.
There are several ways to build a massive business here,” Meta CEO Mark Zuckerberg told investors Wednesday in an attempt to calm investors over the company’s AI push, which he said could take years to pay off.
Meta's stock price fell 15% when markets opened on Thursday, wiping $190 billion off its market value. This was in reaction to Meta's pledge to increase spending on artificial intelligence
AI technology is many things, and one of them is expensive! Major companies are spending billions upon billions of dollars to develop AI technology, and you would think that their investments have paid off.
Meta is working on a unified model for AI recommendations across its platforms, which has shown solid improvements in engagement. Explore more details here.
Meta has installed Meta AI on Facebook, Instagram, WhatsApp and Messenger to help users “to get things done, learn, create and connect with the things that matter to you,” the company said.
Pretty much every tech company has been investing in generative AI for the past two years, and Apple is rumored to finally bring new AI-based tools to iPhone users soon with iOS 18. However, the costs of operating such tools are quite high,