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Meta’s Zuckerberg Touts AI Progress but Warns of ‘Serious Infrastructure’
- Meta's Q3 earnings report saw record revenues of over $40.6bn, up 19% YoY with advertising-revenues at $39.9bn with ad impressions delivering 7% growth YoY compared to 21% YoY growth rates in the previous year worldwide.
- Meta's CEO, Mark Zuckerberg sees serious infrastructure requirements for AI and this infrastructure would demand significant investments but the company has not yet decided on a final budget.
- The company has set its 2024 capex widening between $38bn to $40bn while its forward guidance of $45bn to $48bn for the fourth quarter sales suggests 12% to 19% growth YoY.
- Meta's shares dropped 3% in after-hours trading on Wednesday presumably due to concerns around margin squeeze due to requisite infrastructure investment for AI.
- Zuckerberg said that AI has a positive impact on the firm's work and rapid adoption of Meta AI and Llama, has been seen across the industry.
- More than a million advertisers were using GenAI tools to create more than 15 million ads in the past month.
- Meta AI has more than 500 million monthly active users and improvements to AI-driven feed and video recommendations have led to an 8% increase in time spent on Facebook and a 6% increase on Instagram this year.
- Revenues of Meta's Reality Labs have risen to $270mn compared to $210mn YoY but there was an increase in operating loss of $4.4bn as company continues to invest in VR and AR efforts.
- Meta's Ray-Ban glasses with Meta AI integration has been doing well and the demand continues to be very strong.
- CFO Li said that they are using advanced models to monetize and enhance marketing performance to achieve meaningful ad performance gains apart from finding opportunities to achieve good traction on Instagram Reels with focus on promoting original content.
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