Zuckerberg, Meta CEO, Requests Patience from Investors Following AI Push | Tech News

Meta Platforms Inc., the parent company of Facebook, is facing a turbulent time as CEO Mark Zuckerberg asks investors to stay patient amidst increased spending on artificial intelligence. The company revealed that it will be spending billions more than expected this year, causing shares to plummet by as much as 19 percent in extended trading.

Zuckerberg reassured investors during a conference call following Meta’s first-quarter earnings report, emphasizing that the company’s investments in AI will eventually pay off. Meta credits AI for recent user growth and advertising success, with improvements in recommendation algorithms driving the company forward.

The company is heavily investing in AI to compete with rivals like Alphabet Inc. and Microsoft Corp. for dominance in the technology. Zuckerberg warned that these investments will take time to generate returns, possibly years, but urged investors to see the long-term benefits AI has to offer.

Despite the increased spending, Meta reported a solid first quarter with revenue exceeding $36.5 billion, a 27 percent increase from the previous year. Profit also more than doubled to $12.4 billion. However, the company projected second-quarter sales below analysts’ estimates, overshadowing its otherwise positive performance.

Zuckerberg’s focus on AI has led Meta to insert the technology into every aspect of its business, from Instagram to smart glasses. The company’s ambitious spending plans for 2024 include investments in infrastructure and long-term bets on augmented and virtual reality.

As Meta navigates through these challenges, the recent legislation signed by President Joe Biden targeting TikTok’s parent company could potentially benefit Meta’s advertising business. With Reels, Meta’s short-video offering, gaining popularity on Instagram, the company may see increased engagement as a result of potential changes in the competitive landscape.