Chicago Mercantile: Certain market data is the property of Chicago Mercantile Exchange Inc. US market indices are shown in real time, except for the S&P 500 which is refreshed every two minutes. Your CNN account Log in to your CNN account After taking a beating in 2022, shares for Meta have surged more than 50% since the start of the year.Īngelo Zino, a senior equity analyst at CFRA Research, said on Tuesday that the second round of layoffs at Meta “officially make us convinced that Mark Zuckerberg has completely switched gears, altering the narrative of the company to one focused on efficiencies rather than looking to grow the metaverse at any cost.” In 2022, Meta lost more than $13.7 billion in its “Reality Labs” unit, which houses its metaverse efforts.Īnd investors appear to welcome Zuckerberg’s shift in focus from the metaverse to efficiency. Many investors had previously griped at the company’s metaverse ambitions and spending. Mogharabi said Meta’s investments in AI “has benefits on both ends” because it can improve efficiency for engineers creating products, and because incorporating AI features into Meta’s lineup of apps will potentially create more engagement time for users, which can then drive advertising revenue.Īnd in the long run, Mogharabi said, “A lot of the investments in AI, and a lot of enhancements that come from those investments in AI, could actually be applicable to the entire metaverse project.”īut Zuckerberg’s emphasis on investing in AI, and using the buzzy technology’s tools to make the company more efficient and boost its bottom line, is also “what the shareholders and the market want to hear,” Mogharabi said. “I do think it is a good thing to focus on AI,” Ali Mogharabi, a senior equity analyst at Morningstar, told CNN of Zuckerberg’s comments. And not to be left behind, Meta announced late last month that it was forming a “top-level product group” to “turbocharge” the company’s work on AI tools. A day before Microsoft’s announcement, Google unveiled its own AI-powered tool called Bard. Microsoft announced in early February that it was incorporating the tech behind ChatGPT into its search engine, Bing. The technology quickly went viral for its ability to generate compelling, human-sounding responses to user prompts and then kicked off an apparent AI arms race among tech companies. Meta and its predecessor Facebook have been involved in AI research for years, but the remarks come amid a heightened AI frenzy in the tech world, kicked off in late November when Microsoft-backed OpenAI publicly released ChatGPT. Arnd Wiegmann/Reuters/FILEįacebook-parent Meta plans to lay off another 10,000 employees The logo of Meta Platforms is seen in Davos, Switzerland, May 22, 2022. The comments come after what the CEO described as a “humbling wake-up call” last year, as the “world economy changed, competitive pressures grew, and our growth slowed considerably.” He nodded to how AI tools can help users of its apps express themselves and “discover new content,” but also said that new AI tools can be used to increase efficiencies internally by helping “engineers write better code faster.” “Our single largest investment is in advancing AI and building it into every one of our products,” Zuckerberg said Tuesday. Building the metaverse “remains central to defining the future of social connection,” Zuckerberg wrote, but that isn’t where Meta will be putting most of its capital. Now, Zuckerberg says the company will focus mostly on cutting costs and streamlining projects. The pivot to efficiency, first announced last month in Meta’s quarterly earnings call, comes after years of investing heavily in growth, including in areas with unproven potential like virtual reality. In a letter to staff Tuesday, CEO Mark Zuckerberg announced plans to lay off another 10,000 employees in the coming months, and doubled down on his new focus of “efficiency” for the company. Roughly a year-and-a-half after Facebook renamed itself “Meta” and said it would go all-in on building a future version of the internet dubbed the metaverse, the tech giant now says its top investment priority will be advancing artificial intelligence.
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