(MENAFN) Meta, the parent company of popular social media platforms Facebook, Instagram, and WhatsApp, achieved a significant milestone in the first quarter of this year by doubling its net profits. Despite this positive outcome, concerns have arisen on Wall Street regarding the substantial costs associated with Meta's investments in artificial intelligence (AI). As the second-largest player in the global online advertising market, Meta reported a 27 percent increase in quarterly sales, reaching USD36.5 billion, with profits totaling USD12.4 billion—both figures surpassing expectations.
However, Meta's announcement of projected investments ranging between USD35 and USD40 billion for the year, primarily directed towards AI initiatives, has triggered apprehension among investors. This heightened expenditure, exceeding initial forecasts, underscores the company's intensified focus on AI infrastructure, research and development, and other related areas. The disclosure of these investment plans prompted a 16 percent decline in Meta's share value during electronic trading following the close of the New York Stock Exchange.
Mark Zuckerberg, the president of Meta, expressed heightened optimism and ambition regarding the company's AI endeavors during a meeting with analysts. Meta, previously known as Facebook, has been striving to catch up with industry leaders such as Google and Microsoft in the race to develop generative artificial intelligence. This technology enables the creation of text, images, and other content based on simple requests in everyday language. Last week, Meta unveiled an enhanced version of its AI-powered assistant, dubbed "Meta AI," designed to answer users' questions akin to GPT Chat.
While Meta's doubled net profits signify its continued financial success, the escalating costs associated with AI investments have underscored the company's commitment to remaining at the forefront of technological innovation. However, the reaction from the financial market highlights the importance of balancing ambitious investment strategies with investor confidence and market expectations.
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