Meta's high expenses and lower-than-expected revenue have disappointed investors, cost the company a market value of about $200 billion and raised concerns that AI costs are rising faster than profits.
The company expects second-quarter revenues to range between $36.5 billion and $39 billion, with an average of $37.8 billion, compared to analysts' expectations of $38.3 billion.
Meta raised its spending forecast for this year to support investments in new AI products and the IT infrastructure needed to support them, adding that spending will continue to rise next year.
He also raised his overall spending forecast for 2024, saying spending could range between $96 billion and $99 billion.
Meta added that capital spending is expected to reach $30 billion to $40 billion in 2024.
“Until we achieve significant revenue from some of these new products, focusing on AI will leverage our investments in meaningful ways,” CEO Mark Zuckerberg said.
Zuckerberg's comments and quarterly results dampened expectations for Meta's investments in artificial intelligence after a series of successful quarters for the social media giant.
Meta posted its biggest daily gain after the company reported strong results following its latest quarterly report and also announced its first dividend.
Investors are skeptical about increased spending on artificial intelligence, and it may take years for some of these investments to pay off.
The company is modernizing its ad buying products with AI tools and short video formats to drive revenue growth, while introducing new AI features such as chat assistants to increase engagement on social media platforms.
Zuckerberg said tens of millions of people have tried the descriptive AI assistant since it became generally available last week.
Going forward, Mita is considering several ways to monetize her assistant, which is currently free to use.
“There are many possibilities, including expanding the reach of commercial messages, inserting ads or paid content into AI interactions, and allowing people to pay to use AI models,” Zuckerberg said. “AI can also contribute to improving app interactions.” To provide them with added value.