July 31 – Social media giant meta platforms say its profits are skyrocketing, putting billions of dollars into artificial intelligence (AI) projects.
The company owns Facebook, Instagram and WhatsApp, revenue for the three months ended June rose 22% from the same period last year, to $47.5 billion (£35.86 billion), and profits rose 36% to $18.3 billion.
At the same time, expenses are also expected to continue to rise, up 12%, $27 billion, as the company steals money to fulfill Chief Executive Mark Zuckerberg’s AI ambitions.
Meta says the biggest cost is the cost of building infrastructure, including servers and data centers, and the wage package for workers.
Before Meta’s earnings announcement on Wednesday, Zuckerberg posted a video on Instagram, explaining his plans to develop something called “AI Superintelligence,” beyond “human intelligence to solve complex problems.”
He also said that Meta will create “personal super intelligence” that uses advanced AI for everyday tasks such as reservations and gift orders after users remember their wedding anniversary.
Mike Proulx of research and advisory firm Forrester said Meta is supporting “the future self as a future growth company” in the event that its current offering collapses.
After releasing the Llama 4 Family of Lager Language Models (LLMS), Meta has been aiming to catch up with rival artificial intelligence developers like Openai and Google after some users and investors were disappointed.
To seduce them from their competitors, they offer top AI talent a $100 million salary package.
Meta also spent more than $14 billion on stake in artificial intelligence company Scaleai and brought in chief executive Alexandr Wang to support its efforts.
Zuckerberg’s strategy was to use the strength of Meta’s core business to fund AI projects.
He said 3.4 billion people around the world use at least one meta app every day.
Meta has also deployed AI to improve its advertising business.
However, the cost of developing super intelligence has sparked concern among some analysts.
“AI-led investment in Meta’s advertising business will continue to pay off and will strengthen revenues as the company pours billions of dollars into tension-like AI ambitions,” Minda Smiley said.
“However, Meta’s exorbitant spending on AI’s vision will continue to lead questions and scrutiny from investors eager to see returns,” she added.
Meta’s stock rose more than 10% in extended trading in New York after earnings was announced.
By the BBC
