Meta’s Avocado Delay Puts $135 Billion AI Bet Under Scrutiny

The company pushed the release to at least May from a planned debut this month, The New York Times reported Thursday (March 12).

The delay follows internal testing that showed the model trailing leading systems from Google, OpenAI and Anthropic in key areas, including logical reasoning, programming and writing, the report said.

Avocado outperformed Meta’s previous generation models and some earlier competing systems, The Information reported Feb. 4, but it failed to match the performance of Google’s newest Gemini models, per the NYT report.

The gap matters because Avocado was not intended as an incremental upgrade. The model was designed to compete directly with frontier systems from OpenAI and Google and to serve as the centerpiece of Meta’s next phase of AI development.

Internally, the model had been framed as a major leap forward. Meta Superintelligence Labs Product Manager Megan Fu described Avocado in an internal memo as the company’s most capable base model yet and suggested it had the potential to outperform rival systems once additional post-training improvements were applied, per the report from The Information.

The production version has not yet met that expectation.

The delay also follows a difficult year for Meta’s AI efforts. The company’s Llama 4 release last year failed to generate strong developer enthusiasm, prompting an internal restructuring across parts of the AI organization, The Information reported Aug. 15.

Avocado had been positioned internally as the reset.

The Gemini Question and What It Signals

The more revealing development may be what Meta is considering in the interim.

The company’s leadership discussed temporarily licensing Google’s Gemini technology to power certain Meta products while Avocado is brought up to competitive performance, the NYT reported. No decision has been confirmed.

Meta has spent years positioning open-source AI models such as Llama as a strategic alternative to proprietary systems from OpenAI and Google. Relying on Gemini, even temporarily, would invert that narrative and raise questions about how quickly Meta’s internal models can reach the top tier of AI performance.

The episode also underscores a broader strategic shift underway inside the company. Meta’s earlier AI strategy emphasized open development and ecosystem adoption through models such as Llama. Avocado represents a move toward more tightly controlled, commercial-grade systems that could power proprietary products.

That transition was already complex. A performance gap only complicates it further.

Meta’s broader AI roadmap remains active. A next-generation model codenamed Watermelon is under development, the NYT reported, along with an image and video generation system known internally as Mango.

However, the timeline now appears less certain than the ambition.

Spending Without a Cloud Business

Beyond the technical delay, Avocado highlights a deeper financial question surrounding Meta’s AI strategy.

The company outlined capital spending plans of between $115 billion and $135 billion for 2026 as it races to build data centers, chips and infrastructure capable of supporting increasingly powerful AI models.

That level of spending places Meta alongside the largest investors in AI infrastructure, including Amazon, Microsoft and Google.

The difference is that those companies operate cloud businesses that directly monetize the computing power they build. Training models for internal use is only one part of the equation. The same infrastructure can also be rented to thousands of enterprise customers.

Meta does not have that outlet. Instead, the company’s AI monetization strategy is expected to run primarily through improvements to its existing platforms. AI is already being used to refine ad targeting, generate content recommendations and power assistant tools across Facebook, Instagram and WhatsApp.

Those applications could drive revenue growth by increasing engagement and advertising efficiency. However, they do not produce the same direct revenue stream as selling AI compute or model access through the cloud. During Meta’s fourth-quarter earnings call, CEO Mark Zuckerberg positioned AI as the company’s next long-term growth engine. Avocado was supposed to provide the near-term proof.

For all PYMNTS AI coverage, subscribe to the daily AI Newsletter.