Mark Zuckerberg\’s metaverse dreams are fading
Meta’s Priorities Shift
Meta, once rebranded to signal a grand return to the metaverse dream, has quietly pivoted its narrative to AI. In a recent note that addressed the loss of 10,000 staff, the CEO referenced the metaverse only twice across more than 2,000 words. By contrast, artificial intelligence was highlighted four times, with Meta positioning the technology as its “single largest investment.”
Layoffs and Investor Rhetoric
When Meta updated its fourth‑quarter earnings, executives spoke about AI six times during the Wall Street call, yet the metaverse vanished from the discussion entirely. The hiring cuts were justified as a “single largest investment,” a strategy that aims to accelerate AI’s integration throughout the company’s product line.
AI as Core Investment
- AI permeates every product. Meta claims it has the infrastructure to deploy AI at an unprecedented scale, promising “amazing” user experiences.
- AI now drives ad targeting on Meta’s platforms, helping the advertising business rebound from Apple’s privacy changes.
- Future budgeting will place Reality Labs—responsible for metaverse work—under the same efficiency push that guides the rest of the organization.
Metaverse Mentions Undercut
Last month, Meta’s CFO Susan Li described the Reality Lab division as a “material cost center.” She pointed to Portal devices and other Reality Lab projects that would likely be shut down this year. The metaverse, once pitched as an immersive, 3‑D version of the entire internet, has become a side note in Zuckerberg’s public commentary.
Future of Social Connection
In his note, the CEO acknowledged that “building the metaverse also remains central to defining the future of social connection,” before swiftly turning to user growth on Facebook, Instagram, and WhatsApp. The metaverse has thus moved from Zuckerberg’s obsession to a footnote in Meta’s broader narrative.
Meta Announces New Effort to Trim Meta Lab Spending
“Year of Efficiency” Focuses on Cutting Duplicate Projects
In the Year of Efficiency, Meta CEO Mark Zuckerberg said the company will rush to cancel low‑priority or duplicate projects, aiming to keep every division as lean as possible.
Investor Relief After Big Meta Lab Losses
Last year, Reality Labs suffered a $14 billion loss, and the company expects a $15 billion hit this year, heading toward a projected $20 billion annual cost. The new guidance makes that outlook appear more modest.
Stock Surges After Cost‑Cut Confession
Shares of Meta rose to their highest level in six months by Tuesday afternoon, gaining more than 7 % by the end of the day.
2023 Expense Outlook Shrinks by $3 Billion
- Original guidance: $89 billion to $95 billion
- New outlook: $86 billion to $92 billion
- Evercore’s Mark Mahaney noted the change on Tuesday
Mahaney Says Efficiency is Growing
“The Year of Efficiency is becoming more efficient,” Mahaney said. “With the new, lowered expense guidance, Meta is declaring that it can recover to growth with de minimis growth in expenses.”
Contact for Insider Insights
Are you a Meta employee or someone else with inside knowledge? Contact Kali Hays at khays@insider.com, on secure messaging app Signal at 949‑280‑0267, or through Twitter DM at @hayskali. Reach out using a non‑work device.
