Meta CEO Mark Zuckerberg defended the company’s large AI outlays on Wednesday, despite the spending contributing to a decline in the firm’s share price.
Meta increased its capital‑expenditure target for the year to between $125 billion and $145 billion but did not specify how the investment would translate into earnings. During the earnings call, Zuckerberg said the spending reflects a bet on “the individual things that people care about” and on capabilities that will become more important in the future.
When analysts questioned the scale of the AI spend, Zuckerberg pointed to the emerging “agentic” AI trend, where digital assistants perform tasks autonomously at a user’s request. He noted that while many agents are being built, few meet the quality standards he would deem safe for a broader audience. “Getting to that quality bar is more important to me than hitting a specific launch week,” he said.
Zuckerberg highlighted the new Muse Spark model, developed by Meta’s “Superintelligence Lab,” and indicated that the technology will be incorporated into products such as smart glasses and the company’s advertising platform. He added that Meta is exploring “novel things” as it pursues its AI ambitions.
Unlike Amazon, Microsoft and Google, which generate revenue from AI‑powered cloud services, Meta’s AI investments are not yet tied to a direct income stream. The company reported operating expenses of $33.4 billion for the quarter, driven by massive infrastructure purchases and a hiring drive for AI talent. Revenue reached $56.3 billion, and net profit was $26.8 billion, beating forecasts, yet the stock fell more than 6 percent after the results were released.
Chief financial officer Susan Li warned analysts that Meta continues to face legal and regulatory headwinds in the United States and Europe, particularly concerning claims of social‑media addiction. “We continue to see scrutiny on youth‑related issues and have additional trials scheduled for this year in the US, which may ultimately result in a material loss,” Li said. A Los‑Angeles jury in March found Meta and YouTube liable for designing addictive platforms that harmed a young woman, ordering the firms to pay millions in damages. The verdict is expected to give plaintiffs in over a thousand similar cases additional leverage and underscores growing judicial willingness to hold social‑media companies accountable for mental‑health impacts.
Meta’s aggressive AI spending, combined with ongoing regulatory challenges, signals a strategic shift for the company as it seeks to embed advanced intelligence across its products while navigating heightened scrutiny from investors and courts alike.
