In Meta's recent call with its investors, CEO Mark Zuckerberg said that the company's AI ventures might not translate into immediate profits.
Zuckerberg on Wednesday cautioned investors about the ongoing generative AI frenzy while discussing the first quarter earnings report.
The announcement on Wednesday led to tumbling of Meta shares, which dropped by 19 per cent and wiped out nearly $200 billion in market cap.
Meta's profitability increased with net income surpassing $12 billion on $36.5 billion revenue last quarter.
While the company remains highly lucrative, its revenue growth is anticipated to decelerate in the foreseeable future.
Meta's report on its website read, "We expect second quarter 2024 total revenue to be in the range of $36.5-39 billion. Our guidance assumes foreign currency is a 1% headwind to year-over-year total revenue growth, based on current exchange rates."
"Historically, investing to build these new scaled experiences in our apps has been a very good long-term investment for us and for investors who have stuck with us," Zuckerberg said during the call.
He added, "And the initial signs are quite positive here, too. But building the leading AI will also be a larger undertaking than the other experiences we’ve added to our apps, and this is likely going to take several years."
He said that around tens of millions of users have given the Meta AI assistant a try since it became widely available last week.
In the future, Meta has plans to make money from its assistant, even though it's free for now.
"There are several ways to build a massive business here, including scaling business messaging, introducing ads or paid content into AI interactions, and enabling people to pay to use bigger AI models and access more compute," Zuckerberg said.
He added, "And on top of those, AI is already helping us improve app engagement, which naturally leads to seeing more ads and improving ads directly to deliver more value."
Zuckerberg suggested that in the coming year, Meta's AI could help improve the quality of its ads by studying how people use the assistant to understand what they might want to buy. Besides their AI projects, he also expressed excitement about Meta's smart glasses made with Ray-Ban.
The Facebook co-founder during the call said that many styles and colours of the glasses are sold out, and the glasses' advanced AI features that are now more widely available.
"I used to think that AR glasses wouldn’t really be a mainstream product until we had full holographic displays," he said. "But now it seems pretty clear that there’s also a meaningful market for fashionable AI glasses without a display."
Meta Platforms CEO Mark Zuckerberg. Image source: YouTube screen grab
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