Chief Executive Officer Mark Zuckerberg said Meta Platforms Inc. had to commit to spending hundreds of billions of dollars last year on the infrastructure needed to power its artificial intelligence products before the company had any idea as to whether they would succeed.
Over the course of the two-hour-plus podcast with host John Collison, Zuckerberg and Wang revealed that Meta’s Chief Financial Officer Susan Li warned on multiple occasions that the cost of failure would be enormous. Meta also recently launched Muse, its personalized AI assistant designed to automate a range of tasks for consumers, including shopping, buying movie tickets and scheduling appointments. It’s a revealing disclosure for a company that has struggled to persuade investors to accept its ballooning expenses for ambitious AI bets. The milestone will test whether Zuckerberg’s multibillion-dollar push to rebuild its AI team has improved the technology enough to compete among leaders. Zuckerberg admitted he wasn’t sure what the consumer reaction would be like to Muse.
Zuckerberg has repeatedly said these bets will pay off, but shareholders are growing increasingly antsy over Meta’s ability to bring in sales and profit at a fast enough pace. “I think Susan scared you a little bit,” Zuckerberg said. On Monday, Meta debuted a long-awaited new AI model that it said is a big leap over its own predecessors, with “frontier capabilities” that its leadership said put it on par with OpenAI’s ChatGPT and Anthropic PBC’s Claude when it comes to coding, or working through financial or legal questions.
The company is spending hundreds of billions of dollars to compete against American tech rivals, including Alphabet Inc., OpenAI and Anthropic, in a race to develop leading AI models and products. It is one of the tech industry’s heaviest spenders when it comes to AI data centers. Next week, investors will get another look at the company’s financials when it reports results after the market closes on October 21. Last quarter, Meta reported its lowest free cash flow in years – a sign of its compounding expenses on data centers and smart glasses – sending shares down 8%.
