Mark Zuckerberg’s Meta Platforms lost another $4.5 billion in its metaverse business Reality Labs in the second quarter of this year, bringing the total metaverse loss to nearly $60 billion since 2019. Meta reported $49 billion in revenue for the second quarter, a 22% increase from last year and the second-largest quarter on record, during its earnings call on July 31.
Meta Focuses on Artificial Intelligence
The California-based tech giant also reported a profit of $13.5 billion, which Zuckerberg attributed mostly to advancements in artificial intelligence and the growth of applications like Threads and WhatsApp.
Meta’s stock price increased by 7.1% in after-hours trading following the earnings call, exceeding most analysts’ expectations for the second quarter results. Zuckerberg stated that the company’s AI assistant, Meta AI, is on track to become the world’s most used AI assistant by the end of 2024, and noted good sales momentum for the AI-powered Ray-Ban Meta smart glasses launched last September:
“We released the first frontier-level open-source AI model, continue to see good momentum with our Ray-Ban Meta AI glasses, and are achieving good growth in our applications.”
Meta plans to significantly increase capital expenditures in 2025 as it focuses on AI research and development. Additionally, despite the public perception that Facebook is primarily for older users, Zuckerberg mentioned that Meta’s CFO Susan Li claimed young users are flocking to Facebook Marketplace.
Details on the Subject
The company briefly mentioned its metaverse research division Reality Labs, responsible for developing VR headsets like Meta Quest 3. Reality Labs earned $353 million in second-quarter sales but still reported a staggering $4.5 billion loss. Since its inception in 2019, Reality Labs has accumulated a total loss of $59.9 billion.
Despite ongoing losses in the metaverse sector, Li expects Reality Labs’ operating losses to increase significantly year-over-year due to ongoing product development efforts in augmented reality/virtual reality and further investments in developing the metaverse ecosystem.
