Meta chief doubles down on AI spending

Increased investment without clear returns

The Meta chief announced that capital expenditures for the year have been raised to between $125 billion and $145 billion, without specifying how these investments will translate into profits.

Focus on future value

Zuckerberg explained during an earnings call that the company’s strategy is based on investing in areas that people value, believing these will become increasingly important in the future. Analysts questioned the scale of spending on AI.

Advancing “Agentic” AI

He highlighted the growing trend of “agentic” AI, where digital assistants independently perform computer tasks on behalf of users. However, he noted that many current solutions still fall short of the quality standards he expects.

Emphasis on quality over speed

Zuckerberg stressed that achieving high-quality AI products is more important than rushing to launch them, stating that he prioritises reliability over speed to market.

New AI developments

He pointed to a new AI model, Muse Spark, developed by Meta’s Superintelligence Lab, which will be integrated into products such as smart glasses and the company’s advertising systems. He added that Meta is experimenting with innovative approaches in AI.

No direct revenue stream yet

Unlike companies such as Amazon, Microsoft, and Google, which generate income by offering AI-powered cloud services, Meta’s AI investments are not yet directly tied to revenue.

Market reaction

Meta unsettled investors by reporting expenses of $33.4 billion as it continues pursuing “superintelligence” through infrastructure expansion and hiring top AI talent. Despite posting a profit of $26.8 billion on revenue of $56.3 billion for the quarter, the company’s shares fell by more than 6 percent.

Regulatory and legal challenges

Chief Financial Officer Susan Li warned of ongoing legal and regulatory challenges in the United States and Europe, including lawsuits related to social media addiction and concerns over youth safety.

Legal scrutiny intensifies

In March, a jury in Los Angeles found Meta and YouTube liable for harm caused to a young woman due to addictive platform design, ordering the companies to pay millions in damages.

Broader industry implications

The ruling strengthens the position of plaintiffs in more than a thousand similar pending cases and signals that courts are increasingly willing to hold social media companies accountable for the mental health impact of their platform designs.