Meta, the parent company of Facebook and Instagram, has exceeded profit expectations by reporting a first-quarter profit of $5.7 billion (£4.6 billion), despite widespread job cuts during this period. The company has attributed its success to the implementation of artificial intelligence (AI) which has delivered positive outcomes throughout its operations.
Moreover, Meta’s total revenue for the quarter amounted to $28.6 billion, while the monthly active users on Facebook reached nearly three billion. Mark Zuckerberg, the CEO, has stated that the company is continuously growing and improving its efficiency to develop better products at a faster pace, thereby reinforcing its ability to deliver its long-term vision.
Caught up with the development of AI
Meta’s CEO, Mark Zuckerberg, has informed investors that the company envisions “an opportunity to introduce AI agents to billions of people in ways that will be useful and meaningful.” Although he provided few specifics, he stated that Meta is currently “exploring chat experiences in WhatsApp and Messenger, visual creation tools for posts in Facebook and Instagram, ads, and over time, video and multimodal experiences as well.”
In a bid to explore practical applications of AI technology, Meta intends to commercialize its privately-run generative AI, following in the footsteps of Google. Despite lagging behind other major tech firms such as Microsoft in this area, Mr Zuckerberg expressed that Meta is “no longer behind in building our AI infrastructure.”
The company is set to release Meta products utilizing generative AI technology in the next few months, which can instantly create sentences and graphics. Notably, this move will not detract from Meta’s virtual reality project, the metaverse. Meta’s Reality Labs division recorded a net loss of $4 billion in the previous quarter, and the company has projected an increase in operating losses in 2023. However, Mr Zuckerberg reiterated that Meta has no intentions of abandoning the metaverse project and is still planning to release the next Quest VR headset later this year.
Successful cost-cutting measures
Coinciding with a period of job and project reductions, Meta’s positive financial figures have emerged as a result of successful cost-saving measures. CEO Mark Zuckerberg had envisioned turning 2023 into a year of efficiency, leading to Meta becoming the most aggressive of the US big tech firms, shedding over 20,000 jobs worldwide in just a few months.
Despite economic challenges and the fallout from 2022, the 3% year-on-year revenue growth for Meta is a significant achievement, according to Debra Aho Williamson, principal analyst at Insider Intelligence.
Mr. Zuckerberg has described 2022 as “a humbling wake-up call” and has encouraged Meta to brace itself for the possibility that the current economic conditions could continue for a prolonged period.
Investment management firm Quilter Cheviot’s Ben Barringer praised the transformation of Meta’s business over the last six months, adding that the company’s focus on efficiency was paying dividends, and it is likely to continue to recover well with the improving macro backdrop.
