No, Meta is not pivoting from Metaverse to AI
Zuckerberg spends most of his time on AI, says Meta's CTO. Is the Metaverse no longer a priority?
Meta's CTO Andrew Bosworth spoke with Nikkei Asia last week. The conversation revolved around the hottest topic in Silicon Valley right now: AI.
Speaking to Nikkei Asia, Bosworth said commercialization of the technology is expected to begin this year. The CTO believes Meta's AI can improve an ad's effectiveness, partly by telling the advertiser what tools to use in making it. The company hopes to apply the technology to all of its products and services.
"We just created a new team, the generative AI team, a couple of months ago; they are very busy. It's probably the area that I'm spending the most time [in], as well as Mark Zuckerberg and [Chief Product Officer] Chris Cox," Bosworth said.
Don't expect a slowdown in Metaverse investments
Anyone who sees this as a pivot to AI is mistaken. First, Meta is already investing more in AI than in the Metaverse. Mark Zuckerberg recently emphasized that advancing AI and building it into every Meta product is the company's "single largest" investment." Only about 20 percent of Meta's investment budget goes to the Metaverse.
Second, Meta will continue to invest heavily in Reality Labs, the division that develops VR and AR products. Zuckerberg has made this clear repeatedly. Reality Labs' total operating loss for 2022 is $13.72 billion, and according to CFO Susan Li, these expenses will continue to rise in 2023. A turnaround should not be expected, at least there are no concrete steps that would lead to such an expectation.
Those who think Meta has moved on from the Metaverse (or reduced focus on it) for AI will find the Q1 2023 income statement shocking. Losses at the Reality Labs division look likely to be up 55-65% YoY (and probably 15% QoQ despite the Year of Efficiency)
— Matthew Ball (@ballmatthew) April 10, 2023
Research and development in AI and the Metaverse are also often intertwined and have many synergistic effects. Many advances in VR and AR would not be possible without advances in AI. Conversely, it may one day be these new computing platforms that turn artificial intelligence into products, such as virtual worlds.
Lots of AI talk: A new PR strategy?
Speaking to Nikkei Asia, Bosworth gives an example of how generative AI can be applied to the metaverse. "So previously, if I wanted to create a 3D world, I needed to learn a lot of computer graphics and programming," Bosworth said. "In the future, you might be able to just describe the world you want to create and have the large language model generate that world for you. And so it makes things like content creation much more accessible to more people."
Meta has been talking more about AI than the Metaverse lately, or avoiding the M-word altogether, and this could be part of a new PR strategy. AI is cool, the Metaverse is not, at least not to most journalists and investors. Meta seems to have figured that out by now.
The fact that Meta's CEO is focusing on artificial intelligence instead of elusive future technologies sends a positive signal to stakeholders. This could be one of the reasons why Meta's share price has risen more than 140 percent since November and is still rising.