Zuckerberg says payoff for Meta's AI push could be a few years away
Meta Platforms has been increasingly pursuing artificial intelligence and, according to CEO Mark Zuckerberg, generating significant revenue from it will take a while.
Speaking on the first-quarter earnings call Wednesday evening, Zuckerberg said the corporate parent of Facebook, Instagram, Whatsapp and Threads would invest "significantly more" to support and help grow its AI development efforts.
"As we’re scaling CapEx and energy expenses for AI, we’ll continue focusing on operating the rest of our company efficiently, but realistically, even with shifting many of our existing resources to focus on AI, we’ll still grow our investment envelope meaningfully before we make much revenue from some of these products," he told analysts and investors tuned into the call.
Some of Meta’s recent AI efforts have included Llama 3 and its Meta AI assistant that uses the large language model.
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For 2024, Meta on Wednesday changed its prediction for capital expenditures, lifting it to $35 billion to $40 billion. It also indicated capital expenditures would grow more in the following year, too, without giving a specific range.
Zuckerberg noted Meta shares have experienced "a lot of volatility" in the past while in the period of "investing in scaling a new product but aren’t yet monetizing" like Reels and Stories.
"I also expect to see a multiyear investment cycle before we fully scaled Meta AI, business AIs and more into the profitable services I expect as well," he said.
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"Historically, investing to build these new scaled experiences in our apps has been a very good long-term investment for us and for investors who have stuck with us and the initial signs are quite positive here, too. But building the leading AI will also be a larger undertaking than the other experiences we’ve added to our apps and this is likely going to take several years," Zuckerberg continued.
The Meta CEO mentioned several ways the company planned to improve cost efficiency amid its AI scaling efforts, including the open source community and building more of its own chips.
Zuckerberg said he viewed the feats Meta teams have notched so far in AI products as "another key milestone in showing that we have the talent, data and ability to scale infrastructure to build the world’s leading AI models and services."
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In the first quarter, the company generated $36.46 billion in revenue, marking a 27% jump from the same three-month period in 2023. Its net income, meanwhile, went from $5.91 billion to $12.37 billion.