In this period of intensifying AI competition in Silicon Valley, Mark Zuckerberg is playing all his cards. By poaching researchers from rivals like Meta (META.O) and OpenAI, he has launched a billion-dollar talent war.
However, as spending increases, so does investor pressure.The company is expected to show its slowest profit growth in two years in its results to be announced on Wednesday: profit is projected to rise 11.5% to $15 billion, while revenue is estimated to increase only 14.7% to $44.8 billion.
Zuckerberg’s latest initiative comes after the weak performance of the “Llama 4” language model. While Meta is allocating hundreds of billions of dollars to massive AI data centers, it has invested $14.3 billion in Scale AI and even poached its CEO, Alexandr Wang. Despite this, the company continues to lay off employees.
For now, investors are supporting Zuckerberg’s “super intelligence” vision; Meta’s shares have risen more than 20% since the beginning of the year. However, analysts are questioning the sustainability of the increasing capital expenditures.
Not wanting to fall behind its competitors Alphabet and OpenAI, Meta established a new unit called the “Superintelligence Lab” last month.
Zuckerberg has pledged to share Meta’s work as open source, aiming to integrate this technology into daily life with products like Ray-Ban Meta smart glasses.However, advertising revenue is still Meta’s main strength. TikTok competition and expected trade tensions in the US are casting a shadow over the company’s future. According to Minda Smiley of eMarketer:
“Meta is effectively using AI in advertising algorithms, but directly competing with giants like OpenAI is both costly and challenging.”
Zuckerberg admits he doesn’t know when superintelligence will become a reality. Lead researcher Yann LeCun is cautious about the current language model approach to achieving this goal.
In summary, analysts say:
“Meta’s AI strategy is more holistic than it was for 2023, but it still hasn’t quite found its direction.”
