Meta forecasts continued spending as it races to build ‘superintelligence'
Even as Meta spends big, Mr Mark Zuckerberg faces questions about whether the outlays will pay off.
SAN FRANCISCO – Meta has shovelled billions of dollars into its artificial intelligence efforts in recent years. Mr Mark Zuckerberg, the company's CEO, recently opened his checkbook even further for a hiring spree to add top researchers to build a 'superintelligent' AI.
On July 30, the Silicon Valley company indicated that its spending will continue rising. The company raised part of its capital expenditure forecast for the year, and said the rate of increase in its spending would jump next year, driven by its construction of data centres, which are the giant computing facilities underlying its AI push.
'I'm excited to build personal superintelligence for everyone in the world,' Mr Zuckerberg said in a statement.
Meta said it would continue spending as it posted revenue of US$47.5 billion (S$61.5 billion) for the second quarter, up 22 per cent from a year earlier and above Wall Street estimates of US$44.8 billion, according to data compiled by FactSet. Profit was US$18.3 billion, up 36 per cent from a year earlier and surpassing estimates of US$15.1 billion.
The company, which owns Facebook, Instagram and WhatsApp, said its AI investments improve its advertising business, which accounts for nearly all of its revenue.
Meta said it expected revenue of US$47.5 billion to US$50.5 billion for the current quarter, above Wall Street expectations of US$46.2 billion. Its shares rose more than 9 per cent in after-hours trading.
Meta's family of apps had 3.48 billion daily users in June, up 6 per cent from a year ago.
Even as Meta spends big, Mr Zuckerberg faces questions about whether the outlays will pay off. He recently offered nine-figure pay packages to hire AI researchers, and in June invested US$14.3 billion in the start-up Scale AI. Mr Alexandr Wang, Scale AI's CEO, joined Meta as its
new chief AI officer .
Investors, who reacted skeptically to Meta's focus in 2021 on the so-called world of the metaverse, have been more patient with Mr Zuckerberg's investment in AI. Part of the reason is that AI has become the focus of the entire tech industry, said Mr Uday Cheruvu, a portfolio manager for Harding Loevner, an investment firm.
But there is pressure for Meta's new AI team to deliver results soon, especially when it comes to improving the company's core advertising business, said Mr Andrew Rocco, a stock analyst at Zacks.
'I think the long-term plan is for Meta to branch out beyond the ads' when it comes to AI, Mr Rocco said, including developing chatbots and personal assistants that mimic human interactions. But 'what's going to move Meta's stock price is how AI is impacting their core business already', he added. NYTIMES
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