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Highlights
- Meta's revenues surged by more than 25% in the first three months of the year, above forecasts.
- According to an earnings report, the social media group's revenues increased by 27% to $36.5 billion, barely over analysts' projections of $36.2 billion.
- Meta's AI spending spree has hurt investors' sentiments despite good quarterly results.
Tech giant Meta’s AI spending spree has hurt investors’ sentiments despite good quarterly results. The shares of the company took a downward turn despite having reported a robust result. Financial Times reports that the firm also raised its capex guidance, giving a hit to investor sentiments.
Meta’s AI Spending Spree Sends Shares Down
According to The Financial Times, although Meta’s revenues surged by more than 25% in the first three months of the year, above forecasts, the company’s shares experienced a roughly 12% decline in after-hours trading on Wednesday due to Wall Street’s reaction to its ongoing expenditure binge on artificial intelligence.
According to an earnings report, the social media group’s revenues increased by 27% to $36.5 billion, barely over analysts’ projections of $36.2 billion. Meta increased its capital expenditure projection for the entire year by up to 40% from $37 billion, citing the need to “continue to accelerate our infrastructure investments to support our artificial intelligence (AI) roadmap.”
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Meta Not Alone in AI Spending Spree
The commitment to spend on AI is not limited to just Meta. Tech behemoths across the globe are currently trying to mint good AI revenue or at least keep a continuous AI spending spree to be industry-dominant. More than two-thirds of jobs are anticipated to be impacted by AI in the future. Apple’s recent announcement that it will concentrate on AI products moving forward is a great illustration of this.
This approach was motivated by IT corporations’ desire to make money from artificial intelligence services. In addition, Microsoft is adding major firms in the same industry to broaden its offering in artificial intelligence technologies. In addition, as most businesses interact with AI products, persons seeking employment in the future will need to be proficient in a wide range of fields.
Meta’s Recent AI Ventures
Apart from a commitment to keep its AI spending spree going in the future, Meta has recently also been venturing more into AI. A good example of this is Meta Platform beta versions of its new large language model, Llama 3. This release includes two implementations incorporated into popular platforms including Facebook, Instagram, WhatsApp, and Messenger, and has strong computational capabilities designed to enhance the Meta AI virtual assistant.
By integrating these models with Meta AI, users can access more sophisticated and seamless digital assistance within their daily applications. In addition, the business has started advertising additional features of the AI assistant on a different website, indicating that it is moving into direct rivalry with companies that provide supposedly more sophisticated solutions, including OpenAI’s ChatGPT.
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