Meta Doubles Down on AI Gamble Despite DeepSeek’s Market Quake!

A visitor stands by a sign posted in front of Meta headquarters in Menlo Park, California



Mark Zuckerberg has committed to investing “hundreds of billions” in artificial intelligence as Meta aims to solidify its leadership in the industry this year, despite competition from the emerging company DeepSeek. During an investor call following the companyโ€™s earnings report, Zuckerberg emphasized the urgency of the coming year, stating, “This is going to be intense because we have about 48 weeks to get on the trajectory that we want to be on in AI.”

Following the announcement, Meta’s stock saw an increase of over 2 percent during after-hours trading, indicating investor confidence in the company’s strong advertising performance, even as Zuckerberg plans to continue extensive investments in AI infrastructure.

In the fourth quarter, Meta surpassed analyst expectations, achieving a 21 percent increase in revenue to $48.4 billion and nearly a 50 percent rise in net income to $20.8 billion. The company has focused on enhancing its AI capabilities to improve content recommendations on platforms like Facebook and Instagram, which benefits its advertising model.

Zuckerberg expressed optimism that Meta’s long-term AI investments would start yielding results this year. He noted the potential of Meta’s AI chatbot, which has 700 million monthly active users, and the Llama models to become leaders in a highly competitive market, competing against players such as OpenAI and Microsoft.

Despite the emergence of a sophisticated open-source model from DeepSeek that caused ripples in the tech industry, Zuckerberg dismissed worries that it could hinder Metaโ€™s development of an open-source standard, affirming the importance of an American standard in this space. He acknowledged that Meta might integrate some of DeepSeekโ€™s innovative advancements.

Under pressure from investors to justify significant capital expenditures, projected to reach between $60 billion and $65 billion in 2025, Zuckerberg highlighted potential strategies for monetizing Meta’s AI chatbot, Meta AI, which is aimed at reaching 1 billion users by year-end. The company is also looking to reduce computing costs by transitioning to custom AI chips.

Research director at Forrester, Mike Proulx, remarked that while 2023 was characterized as a year of efficiency, 2025 is shaping up to be one of “intensity.” He noted that the developments at DeepSeek could further challenge Meta during this pivotal time.

Additionally, Zuckerberg mentioned that 2025 would be significant for reshaping the company’s interaction with governments, commending the current administration’s support for American technology. He expressed confidence in the governmentโ€™s commitment to defending American values and interests globally.

In a related development, Meta confirmed its agreement to pay approximately $25 million to resolve a lawsuit from Trump regarding the suspension of his accounts in 2021.

photo credit: www.ft.com

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Source: USD @ Thu, 30 Jan.