Meta will increase spending on AI as revenue grows

The tech giant plans to spend heavily on artificial intelligence as it sees “strong momentum” in the area.

Meta’s third-quarter revenue rose 19% to $40.59 billion, its highest in years, which CEO Mark Zuckerberg attributed to the rise of artificial intelligence in the company’s applications and business. In its latest earnings report yesterday (October 30), the tech giant reported a strong 35% increase in net income to $15.68 billion, pushing diluted earnings per share up to $6.03.

CFO Susan Lee expects Meta’s fourth-quarter revenue to rise another $5 billion, bringing it to the $45 billion to $48 billion range.

Zuckerberg said parts of the company’s “long-term vision for artificial intelligence and the future of computing” have become “more clear,” and added that Meta AI now has 500 million monthly active users. Improvements to Meta’s AI-powered feed and video recommendations have led to an 8% increase in time spent on Facebook and a 6% increase on Instagram this year, he said, and more than 1 million advertisers have used Meta’s generative AI tools to create more than 15 million advertisements. in the last month.

Meta’s large language models are evolving quickly, Zuckerberg said: Llama 4, the newest LLM model, is “under development.” He expects the smaller Llama 4 models to be released first early next year, which he says will be a “big deal,” pointing to new capabilities and speed.

“AI opens up opportunities”

Notably, Zuckerberg stated that the development of AI will accelerate the company’s core business, and therefore additional investment in AI is necessary. “Our investments in artificial intelligence continue to require significant infrastructure, and I expect to continue to invest heavily in that,” he said.

The company did not provide an exact budget for future AI spending, but Lee said it expects a significant “increase” in the capacity of its infrastructure.

The meta stock fell 4% despite elevated earnings and revenue expectations. Reuters reporting that investors were likely spooked by big AI spending plans.

The increased focus on artificial intelligence also comes with regulatory challenges.

Meta released compact versions of Llama 3.2 AI models last week, he said, it was using significantly less space than the original 3.2 versions released. last month. However, the larger multimodal Llama 3.2, 11B and 90B models, which can handle multiple formats such as text, images, audio and video, not available in EU. Meta said over the summer it would not release the models in the EU due to the bloc’s “unpredictable” regulatory environment.

A month before this announcement, the company abandoned plans to train its large language models using publicly available content adults share on Facebook and Instagram, following intensive discussions with the Irish Data Protection Commission.

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