In light of AI future aspirations, Meta loses $163 billion
The intentions of Facebook’s parent company Meta to invest heavily in artificial intelligence (AI) appear to have been met with disapproval by investors, as the company’s market value plummeted by $163 billion on Thursday.
When Mark Zuckerberg’s Meta revealed that its quarterly earnings had quadrupled year over year while revenue had increased by 27%, the company’s stock price plummeted by 13%.
The Menlo Park, California-based tech giant intended to invest $5 billion in artificial intelligence (AI) as the worldwide battle for the top spot in technology has intensified due to the participation of Microsoft, Google, OpenAI, and other well-known investors.
The technology required for such a scheme is said to be expensive and time-consuming, even if it is predicted that the investment in AI will provide enormous returns.
According to Sophie Lund-Yates, head equities analyst at Hargreaves Lansdown, “the language around spending plans has become bolder once again, and this could be what’s spooking markets,” a CNN story on Thursday cited her as saying.
“Despite all of Meta’s ambitious AI initiatives, it cannot afford to lose focus on the foundation of its company, which is its advertising operations. Although Meta has abundant resources, its market dominance in digital advertising must be protected at all costs, the speaker continued.
As previously stated by Meta, the tech giant estimates that the entire year’s expenditure would be in the $35–$40 billion area. This is a significant increase over the prior estimates.
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