Mark Zuckerberg says he is absolutely not abandoning the metaverse as company division loses $4 billion

• Mark Zuckerberg denied that Meta was pivoting its focus from the metaverse to AI.
• "We've been focusing on both AI and the Metaverse for years now, and we will continue to focus on both," he said.
• The division that houses Meta's AR and VR projects posted a $4 billion loss in the first quarter.

Meta CEO Mark Zuckerberg says he isn't abandoning the metaverse, even as the division of the company that manages its virtual and augmented reality projects lost $4 billion in the first quarter.

Recent comments by Zuckerberg and other Meta leaders have suggested that the company is going bullish on AI and switching its strategy away from the metaverse. Top Meta execs are now spending most of their time focused on AI, CTO Andrew Bosworth said earlier this month.

"A narrative has developed that we're somehow moving away from focusing on the metaverse vision," Zuckerberg told investors on Wednesday. "So I just want to say upfront that, that's not accurate. We've been focusing on both AI and the Metaverse for years now, and we will continue to focus on both."

"Building the metaverse is a long term project, but the rationale for it remains the same and we remain committed to it," he added, noting that AI investment was needed to develop the technology powering the metaverse.

Reality Labs, the division that houses Meta's AR and VR units, including the metaverse and its Oculus Quest headsets, reported a $4 billion operating loss in the three months to March 31, slightly lower than the $4.3 billion losses it reported in the previous quarter, ending December 31.

"We continue to expect Reality Labs operating losses to increase year-over-year in 2023," Meta said in its earnings report. It added that it expected capital expenditures of between $30 billion and $33 billion for the year, in part because of increased investment in its generative AI initiatives as well as its focus on building AI capacity to support ads, Feed, and Reels.

"There are two major technological waves driving our roadmap – a huge AI wave today and a building metaverse wave for the future," Zuckerberg said.

Zuckerberg said that Meta was launching a new consumer virtual and mixed reality device later this year. "It was a very big step forward for VR, and I'm really excited to show the world all the improvements and new technology that we have developed since then at a price point that will be accessible for lots of people," he told investors.

Zuckerberg's comments came just a week after the company started telling tech workers whether they'd been affected by Meta's latest batch of layoffs. Meta announced it was laying off more than 11,000 staffers in November, and then announced another round of cuts affecting 10,000 workers four months later as part of its "year of efficiency."

Zuckerberg had said that November's layoffs were a "last resort" and were the result of overinvestment during the pandemic.