Meta shares tumble after Zuckerberg’s AI announcement

The company’s share price fell 16 percent shortly after Meta chief Mark Zuckerberg gave a speech about artificial intelligence technology.

Before this fall on Wednesday, Zuckerberg said it could take years for the company to see profits from various generative AI projects.

Earlier, Zuckerberg, a well-known Silicon Valley face, had announced that the company’s earnings for the quarter could fall short of Wall Street estimates. After that, the company that owns Facebook, Instagram and WhatsApp, Meta’s share price fell to around 412 dollars.

Meta’s revenue rose 27 percent in the quarter ended March 2024, more than double the same period a year earlier. Hence, there has been some increased interest among investors in the company’s earnings for the quarter ending June 30.

In addition, the company has announced to increase its capital expenditure for 2024 to 3.5 to 4 trillion dollars, which was previously between 3 to 3.7 billion dollars.

Much of this could be spent on building various AI infrastructures, including chip design and building data centers.

Since unveiling ChatGPT in 2022, Zuckerberg has been trying to add AI tools to his own products. These include search tools for Instagram and Facebook, smart augmented reality glasses and various image generation software.

Meta unveiled their new AI model ‘Llama 3’ last week. They claim, this tool is an art in itself.

The company also said it will keep its new AI model open source to compete with Google and OpenAI. The two companies have not agreed to keep their AI products open.

“The new version of Meta AI ‘Llama 3’ is another step in building the world’s leading AI system. We’ve also seen great progress in our own apps. We are even slowly moving towards creating a metaverse.”

However, Mater estimates that its earnings in the second quarter of the year may not meet Wall Street’s expectations as investment in the AI ​​sector increases.

Zuckerberg also warned investors that it could take several years to see a return on the money Meta is pouring into AI technology. However, he also requested them to be patient to enjoy its long-term benefits.

“We’re getting more positive and ambitious with AI,” said Meta boss Zuckerberg.