June 6, 2023

Meta boss Mark Zuckerberg spoke highly of the company’s artificial intelligence ambitions as the parent company of Facebook and Instagram reported a stronger-than-expected quarter — despite the metaverse division losing nearly $4 billion.

Zuckerberg spent six minutes of his opening remarks talking about Meta’s AI projects during the company’s first quarter earnings report on Wednesday — compared to just 90 seconds on the metaverse, according to Bloomberg.

“It’s been a pretty amazing year of progress on this front, and the work that’s happening now will impact all of our apps and services,” Zuckerberg said of Meta’s push into AI technology.

“I think there is an opportunity to introduce AI agents to billions of people in a way that will be useful and meaningful,” added Zuckerberg, noting that Meta is exploring possible implementations of AI technology ranging from customer service to “ chat experiences” in its WhatsApp and Messenger apps.

The tech giant reported first-quarter revenue of $28.65 billion and earnings per share of $2.20. Both numbers beat analysts’ projections.

Meta shares rose nearly 15% in early Thursday trading.

Mark Zuckerberg
Meta is putting more money into its AI projects.
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On the conference call, Zuckerberg pushed back claims that the company is putting the metaverse on the backburner — after a lukewarm reception from investors and the public — in favor of AI development.

“There’s been a narrative that we’re somehow moving away from focusing on the reverse vision, so I want to say up front that’s not accurate. We have focused on both AI and the metaverse for years, and we will continue to focus on both,” he said.

Zuckerberg said Meta’s work on AI is divided into two main areas: a “massive recommendations and ranking infrastructure” coupled with core features such as feeds, Instagram Reels and digital ads, and “new generative base models” that enable entirely new product classes. to make. and experiences.

Mark Zuckerberg
Mark Zuckerberg said that Meta is still focused on the metaverse.

A notable example of a tool powered by so-called “generative AI” is ChatGPT, the hugely popular chatbot released last year by OpenAI, backed by Microsoft.

Time users spent on Instagram increased by more than 24% — a trend Zuckerberg attributed to AI-powered recommendations for Reels, the company’s answer to TikTok’s video feed.

Zuckerberg’s reverse push was a weak point in an otherwise strong string of quarterly results.

Mark Zuckerberg
Mark Zuckerberg angered some investors last year with major spending on the metaverse.

For the quarter, Meta’s Reality Labs division — the segment that includes the metaverse unit — lost $3.99 billion. The division generated revenue of just $339 million, down 51% from the year-ago quarter.

“We continue to expect Reality Labs business losses to grow year-over-year through 2023,” the company said in its earnings release.

Zuckerberg had last year harassed some investors who grumbled that the company was overspending on the metaverse at the expense of its core social media business. Meta lost $13.7 billion last year through its Reality Labs unit.

Mark Zuckerberg
Meta posted strong first quarter results.

This year, Zuckerberg has embarked on a “year of efficiency” with more than 21,000 layoffs this year and other cost-cutting measures, even as the company makes strides in AI.

“After this happens, I think we will have a much more stable environment for employees,” Zuckerberg said.

“And then I expect for the rest of the year we will focus on improving our distributed work model, delivering AI tools to improve productivity and removing unnecessary processes across the business,” he added .