Wall Street investors are reportedly worried about Meta's multibillion-dollar artificial intelligence (AI) plans.
on Thursday (April 25), despite CEO Mark Zuckerberg's attempts to reassure investors as the tech giant reported quarterly results, Bloomberg News reported. The company's stock price fell 15% in early trading.
According to a report by Bloomberg, Hargreaves Lansdown analyst Sophie Rand-Yates said, “None of Meta's bold AI plans take attention away from the core of the business, which is its core advertising efforts.'' “I won't be able to go,” he said in the memo. . “That doesn’t mean we ignore AI, but it does mean we need to make targeted spending that aligns with a clear strategic view.”
As reported here on Wednesday (April 24), Meta's earnings will help the company accelerate its return on investment in AI, rather than new artificial intelligence for consumers, developers, businesses, and enterprises. The company indicated it plans to spend $5 billion more than originally planned to build the product. hardware manufacturer.
Meta's capital expenditures for its AI and Metaverse development arm Reality Labs are expected to be in the range of $35 billion to $40 billion by the end of this year.
Zuckerberg mentioned last week's announcement of Meta AI, the latest version of the AI assistant that leverages the latest advances in the company's large-scale language model (LLM) Meta Llama 3. “We expect our model to be further improved from open source contributions,” he said.
“Collectively… our team achieved another significant milestone in demonstrating that we have the talent, data, and ability to scale our infrastructure to build world-leading AI models and services. ” added the CEO.
“This leads me to believe that we need to invest significantly more in the coming years to build even more advanced models and the largest AI service in the world.”
As a Bloomberg report notes, Zuckerberg begged investors for patience as the company embarks on big technology projects such as Reality Lab, which lost $16 billion in 2023. This isn't the first time.
Meanwhile, PYMNTS explored Llama 3's capabilities in recent interviews with industry experts such as Austin Vance, CEO of digital transformation company Focused Labs.
He said one of the main advantages of Llama 3 is that it comes in both large and small models, with the latter offering better performance than the accessible version of OpenAI's GPT 3.5 Turbo. He said that it reduces inference time and has the added benefit of being open source.
“This allows enterprises to deploy models on their own infrastructure using relatively affordable hardware, giving them control over their security environment, data, and development workflows without the significant costs associated with OpenAI. ” Vance said.
