Meta Platforms recently created a new Meta Superintelligence Labs division focusing on AI.
He has spent a lot of money on artificial intelligence and has recently invested $14 billion in private scale AI.
Meta is already burning a lot of cash through reality lab, the Metaverse business unit.
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Meta Platform (NASDAQ: Meta) It’s getting bigger with artificial intelligence (AI). We invest and hire more staff to take advantage of AI-related opportunities. Recently, they announced their latest division, Meta Superintelligence Labs, also known as MSL.
MSL will be the home of AI efforts as it demonstrates the seriousness of investors in developing next-generation AI technologies. This comes after recently announced a significant investment in another AI company.
Will MSL help the business grow and spike Meta’s stocks, or will it prove to be just another money pit?
Image source: Getty Images.
Meta has grown in AI and that was already clear even before the announcement of the launch of a new division. Previously, the company announced plans to create a standalone app for Meta AI, a chatbot built into existing social media platforms. It also announced a $14 billion investment in scale AI, which attracted the company’s founder and CEO Alex Wang to lead the AI business in Meta.
AI is undoubtedly a great opportunity for meta and other tech giants. But it’s also a money pit, and the payoffs aren’t always clear to insiders and investors. Last year, research firm Gartner predicted that 30% of the generated AI projects would be abandoned by the end of 2025 due to multiple factors, including rising costs and a lack of clear value for the company.
Meta was offensive when it came to pursuing growth opportunities regardless of cost. A few years ago, I began reporting on the Reality Labs section. This focuses on metaverse. The venture struggles to prove its value, so the division routinely suffers billions of operating losses each quarter. However, the highly popular apps (including WhatsApp, Instagram and Facebook) and a huge amount of ad revenue have generated nearly $67 billion in revenue over 12 months.
However, whether MSL follows the same fate can be a fiery issue for investors who decide which direction social media stock will move from here.
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Meta could spend a lot of cash on this new division, but I think this move makes much more sense than Metaverse.
Using a headset for metaverse can be less practical if you want to maintain a multi-hour connection, and while glasses may be easy to wear, it can also come with other challenges: privacy. However, AI can be incorporated into any part of your business, such as strengthening the advertising business of Meta and improving the user experience on social media networks. There are more viable ways to invest in AI to get rewarded with Meta in the long run.
A major advantage for the company is that it has billions of active users each month, providing a lot of data that can train AI models. The biggest challenge for many companies creating AI models is accessing the data they need to make them effective and useful. Meta has a huge amount of data on its social media platform, which has a great advantage over other tech companies in this regard. You may need to spend money to access your data, but it can cost less than other businesses that develop chatbots and train AI.
Meta AI already reaches 1 billion users every month across all of the company’s applications. The company appears to be a great starting point for building an AI business.
Meta has some exciting possibilities with AI, but I would recommend you still refrain from investing in the company unless you have a clearer strategy on what you intend to do with AI and how much reward you will receive. My preference is that it favors defeating the real-life lab and focusing on this new division. It could potentially have multiple cash-combustion units in your operations, which could undermine cash flows and profits in the near future.
AI is an intriguing growth opportunity, but investors may want to take a meeting approach with the company for now. For now, that’s not obvious, so it’s a reason to wait for the bystanders for the time being.
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Randi Zuckerberg, a former director of market development, Facebook spokeswoman and sister to Metaplatform CEO Mark Zuckerberg, is a member of Motley Fool’s board of directors. David Jagielski has no position in any of the stocks mentioned. Motley Fool has a position and recommends a meta platform. Motley’s fool recommends Gartner. Motley Fools have a disclosure policy.
Will Meta Platforms’ new Superintelligence Labs division bring inventory to new heights? Originally published by The Motley Fool
