Mark Zuckerberg explains why he's happy to keep spending boatloads on AI
Meta
- Meta will continue to spend big on artificial intelligence, executives said in an earnings call.
- The company outperformed Q3 expectations with Mark Zuckerberg citing AI progress as a factor.
- Meta spent the year pouring money into AI research and development and doesn't expect to stop soon.
Mark Zuckerberg is staying the course with Meta's heavy AI spending.
The company reported its third-quarter earnings on Wednesday, outlining how its $40.59 billion quarterly revenue beat expectations of $40.25 billion.
Zuckerberg attributed the "good quarter" to AI progress across Meta's apps and business, saying the company has no plans to slow down its investments in the technology.
AI has had "a positive impact on nearly all aspects of our work," he said. It's "clear that there are a lot of new opportunities to use new AI advances to accelerate our core business," he said.
But he added that the company's AI investments continue to require a "significant acceleration" in infrastructure expense growth.
Meta said it expects its capital expenditures for the year to be in the range of $38 billion to $40 billion, up from its projected range of $37 billion to $40 billion.
The company is betting big on AI, training its own models and integrating the technology into consumer products across its platforms.
Meta spent the year pouring money into AI research and development, especially in expanding its collection of GPUs.
During the call, Zuckerberg celebrated the "rapid adoption" of the company's chatbot Meta AI and Llama AI models.
The focus on AI, however, continued to drive up costs at the company, which is likely to see a "significant acceleration in infrastructure expense growth next year," executives said.
Emarketer principal analyst Jasmine Enberg said Meta's big AI spending shouldn't spook investors, citing the Q3 revenue numbers. But the company must prove it can continue to cover its AI costs even as they trend upward, she added.
Meta's AI approach goes beyond delivering products like Meta AI and Meta Ray-Bans, executives said Wednesday. They also believe the tech can be used to streamline company processes, such as coding and content moderation.
Chief Financial Officer Susan Li said AI has proved efficient in reducing costs over time. She said it has helped the company save money because employees can now use AI for coding, which has made them more productive.
"It's early, but we're seeing a lot of adoption internally of our internal assistance and coding agents," she said.