Meta, Facebook's Parent Company, Reports Strong Profits Driven by AI

Meta, Facebook's parent company, reports strong Q1 profits of $5.7 billion, driven by AI integration across its business.

Meta, Facebook's Parent Company, Reports Strong Profits Driven by AI

Meta, the parent company of Facebook and Instagram, has reported a profit of $5.7 billion for the first quarter of this year, exceeding expectations despite job cuts. The company attributed its success to using artificial intelligence (AI) across its business.

AI Driving Good Results

Meta CEO Mark Zuckerberg said that AI was driving good results across the company's business. The company sees an opportunity to introduce AI agents to billions of people in ways that will be useful and meaningful. Meta is exploring chat experiences in WhatsApp and Messenger, visual creation tools for posts on Facebook and Instagram, and ads, and over time, video and multimodal experiences as well.

Commercializing Generative AI

Meta intends to commercialize its privately-run generative AI, joining Google in finding practical applications for the tech. Meta established Facebook's AI Research laboratory in 2013 but has not made big inroads in this area yet, as some other big tech firms have done. However, Mr. Zuckerberg insisted that Meta was no longer behind in building its AI infrastructure and said generative AI Meta products, which can instantly create sentences and graphics, would be released in the coming months.

Cost-Cutting Pays Off

The positive financial figures coincide with a period where Meta has slashed jobs and projects. The aim was to turn 2023 into a year of efficiency, said Mr. Zuckerberg. Meta has been the most aggressive US big tech firm when it comes to downsizing, shedding almost a quarter of its global workforce, more than 20,000 jobs, in just a few months.

Year of Efficiency

Mr. Zuckerberg has called 2022 a humbling wake-up call and said it would be wise to prepare ourselves for the possibility that this new economic reality will continue for many years. The year of efficiency Zuckerberg likes to talk about is bearing fruit. These results are a strong beat on the expectations and, given the improving macro backdrop, Meta should continue to recover well.

Meta's Reality Labs Division

Meta's Reality Labs division reported a net loss of $4 billion last quarter, and the company said it expected operating losses to increase year over year in 2023. However, Mr. Zuckerberg said the narrative that has developed that Meta is moving away from the metaverse was not accurate, adding it still planned to reveal the next Quest VR headset later this year.

Meta's total revenue was $28.6 billion, while the number of people on Facebook monthly rose to just under three billion. Mr. Zuckerberg said, "Our community continues to grow. We're also becoming more efficient to build better products faster and put ourselves in a stronger position to deliver our long-term vision."