Will Meta's $14 Billion Bet on AI Ever Pay Off? (cnbc.com)
- Reference: 0183871918
- News link: https://tech.slashdot.org/story/26/06/14/1842208/will-metas-14-billion-bet-on-ai-ever-pay-off
- Source link: https://www.cnbc.com/2026/06/14/meta-hired-alexandr-wang-to-build-ai-its-zuckerbergs-job-to-sell-it.html
> Wang's big accomplishment was the delivery of [2]the Muse Spark AI model in April, marking Meta's first jump into proprietary foundation models and away from a strict adherence to open source, or open weight as it's more commonly called in AI... "Meta needs to provide more proof points of both adoption and commercialization," said Ralph Schackart, an analyst at William Blair who recommends buying the stock. "Investors are looking for Meta to monetize a new AI-first product, beyond the substantial positive impact AI is having on enhancing the advertising models." Wall Street, at least so far, is unimpressed. Meta's stock is down 18% over the past 12 months, the worst performer in the megacap group, along with Microsoft, which has its own challenges in AI. That's even after Meta reported 33% revenue growth in the first quarter, the [3]fastest rate of expansion for any period since 2021.
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> For Meta, the problem started with what some industry experts called, in hindsight at least, a strategic blunder. The company jumped into AI with its Llama family of models, offering an [4]open-source approach that allowed developers to freely tinker, while the other big model makers charged for access. In April of last year, Meta's release of Llama 4 fell flat, failing to captivate developers and leading Zuckerberg to reconsider his company's approach to AI development... Since the release of Muse Spark, Meta has unveiled new AI and business-related [5]subscription plans as part of an effort to expand its business beyond online ads. Historically, it [6]hasn't worked . Meta still counts on ads for 98% of revenue. Schackart said he wants to see "tangible evidence of a growing list of new, AI-first products created by Muse Spark, even if monetization lags." He said that's "what investors are looking for."
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> No matter how good Wang's model may be, Zuckerberg has a high hill to climb with developers coming off the Llama debacle. "I think the AI community largely ignores Meta at this point," said Rob May, CEO of the startup Neurometric, which works in the realm of token engineering.... Krish Subramanian, the CEO of consulting firm KOI AI and former product head at IBM Consulting, said developers are more excited about Google's AI models than what Meta is offering. The appeal of Llama was that it specifically targeted developers wanting open-weight alternative models, while with Muse Spark, Meta has made little effort in that direction, he said. "The lack of developer trust will come back to hit them if they don't focus on third-party developers," Subramanian said, noting that it took years for Microsoft to regain trust from open-source coders during the early days of Azure. "To just focus on a walled-garden kind of an ecosystem and ad revenue as the main source of income, they probably will never become the big player," he said.
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> A Meta spokesperson pointed to Wang's recent comments about the company's continued support for the open-source ecosystem, and said Meta still plans to offer outside developers access to Muse Spark's underlying technology via an API, as it previously announced. "We're already testing with some early partners, and look forward to releasing it this month," the spokesperson said.
"That Zuckerberg's [7]metaverse and virtual reality ambitions have generated [8]over $80 billion in total losses since late 2020 makes the AI pitch a tougher sell," the article points out, citing this observation from Howard Yu, business professor at Switzerland's International Institute for Management Development.
"He's running out of the space for his credibility to last," Yu said. "I think the virtual reality foray may have burned up a lot of his goodwill in front of investors."
[1] https://www.cnbc.com/2026/06/14/meta-hired-alexandr-wang-to-build-ai-its-zuckerbergs-job-to-sell-it.html
[2] https://www.cnbc.com/2026/04/08/meta-debuts-first-major-ai-model-since-14-billion-deal-to-bring-in-alexandr-wang.html
[3] https://www.cnbc.com/2026/04/29/meta-q1-earnings-report-2026.html
[4] https://www.cnbc.com/2023/10/16/metas-open-source-approach-to-ai-puzzles-wall-street-techies-love-it.html
[5] https://www.cnbc.com/2026/05/27/meta-testing-ai-subscription-services-cheapest-plan-at-7point99-a-month.html
[6] https://www.cnbc.com/2026/05/30/meta-struggled-selling-anything-other-than-ads-will-ai-be-different.html
[7] https://www.cnbc.com/2026/01/13/meta-lays-off-vr-employees-underscoring-zuckerbergs-pivot-to-ai.html
[8] https://www.cnbc.com/2026/04/29/metas-reality-labs-lost-over-4-billion-in-first-quarter.html
Never held accountable (Score:4, Insightful)
The fact Zuckerberg is still at the head of this company is an indictment against our economy, our culture and the entire problem people have with the wealthy: once you are wealthy you can fuckup seemingly an infinite number of times and not suffer any consequences.
First the general social issues with Facebook with it's corrosive algorithms. That should have sunk him. Then sinking how many billions into the metaverse, so much so that you renamed the company? Could any of us make that scale of mistake and not only keep our job but even make more money?
And now this, another failed billion dollar loss and even if he is removed from the CEO role he'll get a multi million exit package, keep all the stock, remain on the board and probably be able to swing more venture capital to new companies.
I don't support what Luigi Mangione did by any stretch but I also find it incredulous when people act perplexed about people who do support his action and like, when you see shit like this...
Re: (Score:2)
When someone has created a successful product, they usually think it's because they're smarter than other people, and they're usually wrong.
Facebook is the only really successful product Zuckerberg has ever created. It succeeded because he was in the right place at the right time, and that doesn't happen very often. All of Meta's other major products are things they bought instead of building themselves. His attempts to build other things from scratch have mostly failed.
He decided "the metaverse" was the
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+5 Insightful
Everyone's gobsmacked when they first try VR and many swept away with ideas about a future where everyone's there. But fuckerberg had the losing combo of self loathing for missing the mobile boat, a Ceasar complex and gobs of ill-gotten wealth so of course he believed himself the visionary who would bring it to the world.
lol no
Re: Never held accountable (Score:2)
No one can fire him. He's the dictator of Facebook. He has controlling interest.
AI investments may not be meant to "pay off" (Score:2)
Of course those currently investing other people's money into AI infrastructure cannot say that part out loud just yet, but there may be no intention to make AI investments "profitable" in the classical sense. If you are convinced that AI will perform thinking better and cheaper than humans, and Robots will perform physical work better and cheaper than humans, then trying to collect money from "customers" becomes obsolete at some point. As soon as the army of robots can produce what their owners need, inclu
Everyone knows Meta = Facebook (Score:2)
Meta doesn't really know how to do anything else with any skill. At best, they're an afterthought in all these other areas... and mostly they don't even reach that status.
Even when they buy out other companies, the only acquisitions that "work" are Facebook-adjacent ones like Instagram.
Re: (Score:2)
> Meta doesn't really know how to do anything else with any skill.
They don't know how to do Facebook very well either: it's been pretty much stagnant and enshittified to death for the past 22 years, and it feels like a forum for greying people whose greying friends haven't bothered to move on either, or to get the date of the next annual meeting of the bridge club.
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> ... and it feels like a forum for greying people whose greying friends haven't bothered to move on either, or to get the date of the next annual meeting of the bridge club.
That's not entirely fair. I know quite a few young people who... maintain their Facebook accounts so they can talk to their grandparents.
Betteridge's law of headlines (Score:2)
No.
[1]https://en.wikipedia.org/wiki/... [wikipedia.org]
[1] https://en.wikipedia.org/wiki/Betteridge's_law_of_headlines
Yeah it will (Score:2)
Everyone keeps thinking of AI is a product. It's not. It's capital. It's something that gets used in the production of products.
And it's something more than regular Capital like we are used to seeing. It's Capital that is explicitly designed to eliminate jobs. It's an entirely new automation technique. Something that we haven't seen since the assembly line was invented.
And yeah if you go back to the industrial revolution it's going to look pretty fucking primitive compared to a modern factory. But t
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AI is only indirectly the capital. The customers are the real capital. AI is the service you provide to them.
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> But the difference between the ruling elite that are pushing for this massive automation and you is that they think in terms of decades and generationally and you think about whether or not you can pay rent next week.
Citation needed. They don't seem to be able to see the past or the present, let alone the future.
> There's no reason why we won't ignore the next big push
Are you in marketing? You're not actually familiar with how LLMs have already reached a dead-end that can't be fixed by adding more of the same.
Zuck on Meta's AI Mess and its New 'North Star' (Score:2)
[1]Zuckerberg on Meta's North Star: "The Most Talented People in the World" Matter [slashdot.org]
[1] https://slashdot.org/submission/17348148/zuckerberg-on-metas-north-star-the-most-talented-people-in-the-world-matter
Has Meta ever done anything that paid off? (Score:3)
I don't mean this as an easy dunk, I really want to know if anyone can think of any counterpoints. I mean they have to exist right?
It really seems to me that Meta, and by extension Zuck, are the worst tech company and CEO of all time, propped up by a money machine they arguably fell into by accident.
But think about it, their only successes since Facebook itself, are just having cash first and buying their competitors.
Otherwise:
- their mobile efforts were basically a failure, but they bought Instagram
- their "pivot to video" was a money losing joke
- within that, remember when they wanted to be Twitch? That was a thing for a while.
- their messaging never really succeeded despite basically starting with the market cornered, but they bought WhatsApp
- where's Farmville today? they were supposed to become an app platform. That was a thing.
- they were going to be the world's ISP for a while, seriously, does anyone even remember that? Starlink broke them.
- and of course, The Metaverse is arguably the single biggest failure any big tech company has ever done
So seriously, am I missing any? Like Google is similar, but they birthed Chrome, gmail, Android, there are big wins among their failures. Meta . . . only misses.
Even if there are AI winners, it's just really difficult to imagine Zuck ultimately doing anything other than taking billions from his ad business and setting them on fire. But maybe the next $100 billion they burn will pay off, it kind of feels like they have to succeed eventually.
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Facebook ads pay well.
Well duh! (Score:2)
The company jumped into AI with its Llama family of models
Of course they'd have issues. Everyone knows llamas can be pains in the asses. Should have gone with alpacas.
No, nothing ever works out (Score:2)
Facebook Home / HTC First "Facebook Phone" — 2013 — discontinued within weeks;
HTC First price cut to $0.99.
Internet.org / Free Basics — 2014 — banned in India 2016; largely abandoned.
Oculus / Reality Labs (VR/AR/metaverse) — Oculus acquired 2014 ($2B); rebrand to Meta 2021 — cumulative operating losses $83.5 billion over 21 quarters as of Q1 2026; budget cut ~30% Dec 2025; 1,000+ jobs cut Jan 2026.
Horizon Worlds — 2021 — missed internal user targets; part of R
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My last 99 investments were flops ... so this one has *got* the be the big one.
Given their record... (Score:2)
Meta pissed away $70 billion on the Metaverse, why should this be different ?
No (Score:1)
LT;DR - No.
Easy come, easy go! (Score:2)
They'll make more money, but they're never going to win the AI race and make that back.
No (Score:3, Interesting)
None of the large LLM "investments" will pay off. They tried token-based pricing, at significantly below what they have to charge to only break even, and it was far too expensive for the value it provides. And there is absolutely no reason to expect cost to come down anytime soon. Optimizing AI implementations has been going on for 70 years. They would need a fundamentally new idea, but these cannot be forced.
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Time is on their side, if they survive for long enough.
Hardware gets better. Models still get smaller. Inference gets optimized. Overall the cost per token (measure it how you want, dollar, electricity, compute, they are all proportional) is going down. The cost the usual customer who wants to ask the AI for a cake recipe is willing to pay stays the same and also the cost the high-paying customers (science, etc.) are willing to pay stays the same when the model quality keeps increasing at the current pace.
S
Re: (Score:2)
> Time is on their side, if they survive for long enough.
"Long enough" will be a lot longer than they have left. And I do not even think time will help. The severe problems with LLMs become harder to ignore every day. The stunts intended to signal might and power become more and more feeble while the language gets more bombastic. And the burning of mountains of cash continues.