Meta, the parent company of Facebook, is making a daring gamble by channeling its substantial advertising revenues into the realms of Artificial Intelligence (AI) and the metaverse. The prospects of success remain uncertain, but Founder and CEO Mark Zuckerberg is doubling down on his investments in order to gain a competitive edge in the marketplace. This year, Meta is expected to allocate at least $38 billion towards long-term investments, including expanding AI infrastructure, which is $1 billion more than earlier projections. Plans for increased spending are also on the horizon for next year.

Meta AI's Increasing User Base

Meta is gradually integrating AI software capable of generating text and images into its applications such as Facebook and Instagram. As a result, Meta AI has amassed approximately 500 million monthly active users. According to Zuckerberg, AI is already making a positive impact on the company's revenue; users spent eight percent more time on Facebook and five percent more on Instagram in the first months of 2024. These increases have been attributed to AI-enhanced recommendations that resonate with users.

Zuckerberg has absorbed losses exceeding $50 billion in pursuit of his vision for virtual worlds, where he predicts people will work and socialise—an idea commonly referred to as the metaverse. In the last quarter alone, Meta's Reality Labs unit, which is dedicated to this venture, reported an operating loss of $4.4 billion with only $270 million in revenue. Following the release of these financial results, an analyst queried during the earnings call if the company had finally reached the peak of its losses. CFO Susan Li affirmed that Meta will continue to invest heavily in Reality Labs as it remains a strategic priority for the long term.

Growth of Threads

Another of Meta's initiatives, the Twitter alternative Threads, is witnessing rapid growth, boasting nearly 275 million monthly active users, according to Zuckerberg. At its peak, the platform was registering one million new sign-ups each day. Meta's CEO also noted a significant increase in user engagement, although specific metrics regarding time spent on Threads were not disclosed.

Despite the challenges and uncertainty surrounding its investments in AI and the metaverse, Meta remains steadfast in its strategy, firmly believing in the potential of these technologies to shape future interactions and engagements.

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