Meta set, its current single-largest investment is on “advancing AI.”

According to Zuckerberg, the corporation will now prioritize cost-cutting.
Around a year and a half after Facebook changed its name to “Meta” and declared that it will fully commit to creating the metaverse, a future version of the internet, the tech giant now declares that developing artificial intelligence will be its top investment goal.

CEO Mark Zuckerberg reiterated his commitment to the company’s new “efficiency” focus in a letter to employees he sent out on Tuesday, along with plans to let off an additional 10,000 workers in the coming months. The shift to efficiency, which was initially revealed last month during Meta’s quarterly earnings call, follows years of significant expansion investments, particularly in promising but unproven fields like virtual reality.

According to Zuckerberg, the corporation will now primarily concentrate on reducing expenses and streamlining programs. Zuckerberg stated that creating the metaverse “remains vital to determining the future of social connection,” but Meta won’t be investing the majority of its resources there.

According to Zuckerberg, “our single largest investment is in improving AI and embedding it into every one of our businesses.” He nodded in agreement when discussing how AI tools may help users of its apps “find new information” and express themselves, but he also mentioned how new AI tools can be used to boost productivity inside by assisting “engineers produce better code faster.”

The CEO said that last year’s “humbling wake-up call” when the “global economy altered, competitive challenges grew, and our growth slowed significantly” was the catalyst for the statements.

Although Meta and its forerunner Facebook have long been engaged in AI research, the comments were made in the midst of a heightened AI frenzy in the tech industry that began in late November with the public release of ChatGPT by Microsoft-backed OpenAI. As a result of the technology’s capacity to provide convincing, human-sounding responses to user queries, it gained widespread attention and appeared to start an arms race in artificial intelligence among computer companies. Early in February, Microsoft said that its Bing search engine will now include the ChatGPT technology. Google released Bard, its own AI-powered tool, a day before Microsoft made its presentation. To ensure that it didn’t fall behind, Meta declared late last month that it was creating a “top-level product group” to “turbocharge” the business’s development of AI capabilities.

According to Ali Mogharabi, a senior equities analyst at Morningstar, Zuckerberg’s comments about focusing on AI are a smart idea. According to Mogharabi, Meta’s investment in AI “has benefits on both ends” since it can boost engineers’ productivity while developing products and because including AI elements in its portfolio of applications may increase user engagement, which in turn may increase ad income.

Ali Mogharabi, a senior equity analyst, said: “I definitely believe focusing on AI is a good thing. In the long run, a lot of the improvements that result from investments in AI, according to Mogharabi, “may potentially be applicable to the entire metaverse project.”

Yet according to Mogharabi, Zuckerberg’s emphasis on investing in AI and leveraging the tools of the trendy technology to increase company efficiency and improve profits is also “what the shareholders and the market want to hear.” Before, a lot of investors had complaints about the company’s spending and goals for the metaverse. In 2022, Meta’s “Reality Laboratories” division, where its metaverse initiatives are housed, suffered losses of about $13.7 billion.

And it seems that investors are pleased with Zuckerberg’s decision to choose efficiency over the metaverse. Shares of Meta have increased by more than 50% from the year’s beginning after falling in 2022.

The second round of layoffs at Meta “officially make us convinced that Mark Zuckerberg has completely switched gears, altering the narrative of the company to one focused on efficiencies rather than looking to grow the metaverse at any cost,” said Angelo Zino, a senior equity analyst at CFRA Research, on Tuesday.