Shares in Meta, the parent company of Facebook and Instagram, fell by as much as 11% after reporting quarterly results that disappointed investors. Revenue grew 28% from a year ago to 1 billion, but massive spending plans on artificial intelligence overshadowed the gains.
Meta said it would spend 30 billion to 45 billion this year, mostly on AI projects, up sharply from the 25 billion it planned just three months ago. Chief Executive Mark Zuckerberg said AI spending was accelerating every part of Meta’s core business and that the company planned to sell AI technology to other businesses.
Chief Financial Officer Susan Li told analysts that selling its technology to other companies would help drive returns on AI investment. Meta’s free cash flow for the quarter fell to 84 million, the lowest level in years, as infrastructure spending consumed nearly all cash generated.
Forrester analyst Mike Proulx said there were similarities to Meta’s metaverse missteps, with the company spending ahead of proven product demand. Investors are now watching other tech giants reporting this week for signals on whether AI spending is generating real returns.
Author: Pulse Of Nations Wire Desk
