:Facebook owner Meta Platforms on Wednesday warned of “significant acceleration” in artificial intelligence-related infrastructure expenses next year, while beating analysts’ estimates for third-quarter revenue and profit.
The results sent mixed signals to investors about whether digital ad sales from Meta’s core social media business would continue to cover the cost of its massive AI buildout.
Shares of the Menlo Park, California-based firm were down 2.9 per cent in after-hours trading.
“Meta needs to prove that it can continue to cover its AI costs as they rise next year, and any weakness in its core ad business could make investors nervous as they continue to wait for a return on Meta’s bigger AI bets,” said Emarketer principal analyst Jasmine Enberg.
Like its Big Tech peers, Meta has invested heavily in data centers to capitalize on the generative AI boom. Unlike providers of cloud services, however, it does not expect to earn money from those investments right away and therefore is more subject to scrutiny from investors around its spending.
Meta CEO Mark Zuckerberg acknowledged in a conference call with analysts that more infrastructure spending “is maybe not what investors want to hear in the near term,” but said the company nonetheless would continue to invest.
“I just think that the opportunities here are really big,” he said.
Zuckerberg added that Meta AI, a generative AI chatbot assistant that can generate images and answer questions, now has more than 500 million monthly active users. That represents a substantial jump from the 400 million users the company said were using Meta AI as of its last disclosure in September.
The world’s biggest social media company kept costs in check in the third quarter, with total expenses of $23.2 billion and capital expenditure of $9.2 billion. It projected a slightly improved expense picture for the year as well, narrowing its total expense