In the global AI arms race, one major player has not been as prominent:
Meta.
Microsoft, Google, OpenAI, all have their core killer products, and each press conference is like a competition, vying for attention, and occasionally dropping a bombshell.
As one of the top five tech giants, Meta has its own AI lab and the support of Turing Award winner Yan LeCun, but it seems to have been left far behind.
However, now Meta seems to be returning to the forefront.
01
From 10,000 layoffs to the strongest financial report in history
In recent days, Meta released its financial report for the second quarter of 2024:
Total revenue of $39.07 billion, a year-on-year increase of 22%. Net profit of $13.465 billion, a significant year-on-year increase of 73%.Both indicators have exceeded expectations, which is quite refreshing in the context of the disappointing results previously released by giants like Google and Microsoft.
After the release of the financial report, Meta's stock price rose by 7%. Citigroup, JPMorgan Chase, and China International Capital Corporation all expressed optimism about Meta, considering it the top stock in the industry.
Advertisement
Going back a quarter further (the fourth quarter of the fiscal year 2023), Meta delivered an outstanding financial report, dubbed as the "best in history":
The market expected $38.9 billion, but the actual revenue was $40.111 billion, a year-on-year increase of 25%, marking the largest growth since the third quarter of 2021.
What about the net profit? It was $14.017 billion, a staggering 201% increase year-on-year.
According to statistics, on that day, Meta's stock price surged by 23.10% at one point, with a total market value reaching $1.22 trillion, an increase of nearly $200 billion in a single day, setting a record for the highest single-day market value increase in the history of the U.S. stock market.
(Due to the outstanding performance, Meta's year-end bonus for 2023 was directly distributed at 1.5 times the usual amount, which is quite enviable.)
In contrast to the plummeting performance in 2022, this consecutive quarter of good performance can't help but make people sigh:
Has Meta finally emerged from the shadow of the metaverse?
Let's go back to 2021 - the so-called "Year of the Metaverse".At the developer conference held at his own home, Zuckerberg announced a decision that shocked the world:
Change the surname to "Yuan" - the company's name "Facebook" was changed to "Meta" overnight for 17 years, and the company's business was fundamentally reformed, claiming to transform from a social media company to a metaverse company.
At this conference, Zuckerberg devotedly depicted the future world he expected:
"This is an immersive Internet, you are not just using or looking at it, but being in it."
"Your TV, work computer, mobile phone, board games, etc., are no longer physical objects assembled in factories, but holograms designed by creators from all over the world."
"In such a future, you can instantly teleport to the office through holograms, without the need for commuting."
"..."
In response, netizens simply do not believe it, and various mocking memes are flying everywhere:
About three months later, that is, in February 2022, the first financial report after Meta's name change was released, and the response was the largest single-day market value loss in the history of American companies.The stock price plummeted by 26%, with a market value loss of over 25 billion US dollars!
The reason for this is the continuous decline in the daily active users of its apps, which casts a shadow over the advertising business that can bring in a large portion of revenue. What about the metaverse department (Reality Labs) that Zuckerberg himself valued the most at the time? It suffered a loss of 10 billion US dollars.
Who can bear this? For a while, the voice of "the metaverse can't save Zuckerberg" was everywhere.
Gloating? No, this is a perfect prophecy.
About a year after the name change, Meta's metaverse application "Horizon Worlds," which was built at a huge cost, had fewer than 200,000 global users, and it first received a wave of bad reviews from its own development team: the quality is too low, there are too many bugs, and the employees themselves are disgusted.
And Zuckerberg's "metaverse selfie" has become a huge joke.
The result of a series of failures has led many people, including investors, to question what life Zuckerberg is playing with: is this the metaverse that burns 20 billion?
And that year, the entire technology industry was impacted for various reasons, and Zuckerberg's decision to go all-in on the metaverse undoubtedly made the situation worse.
In the end, Meta was severely damaged: the performance continued to decline, and the company's stock price plummeted by 65% year-on-year.Finally, Zuckerberg also realized the severity of the situation (of course, the meeting's wording was "the situation obviously did not progress in the direction we expected").
Then, what we saw was the announcement of "graduation" for tens of thousands of employees at the end of the year, as well as various cost-cutting policies.
CTO Andrew Bosworth was unreserved in an interview:
This experience was not only the low point in 2022, but it can even be said to be the lowest point in my entire career.
Looking back at 2022, it was indeed a dream-like past for tech giant Meta.
Fortunately, this is a man-made predicament, and Zuckerberg's "awakening" is not too late.
In February 2023, about two months after the birth of ChatGPT, Zuckerberg also announced:
The establishment of a top product team, focusing on AIGC.
Although there were detours, Meta is indeed a mature company. After a quick rectification and repositioning of focus, it quickly began to recover.
Now, more than a year has passed, Meta has started to regain market confidence with stable financial reports and has begun to show its determination in the field of AI.Zuckerberg's AI Determination
In Meta's latest financial report, the main highlight comes from the digital advertising market, which continues to grow in market share. This is Meta's core profit business, accounting for 98% of its share, mainly contributed by applications such as Facebook, Instagram, WhatsApp, and Messenger.
The financial report shows that 3.27 billion people use at least one of these applications every day, with WhatsApp currently having more than 100 million monthly users in the United States, and Threads (Twitter's competitor program) approaching 200 million.
Together, these applications have helped Meta's advertising revenue to grow by 22% year-on-year in this quarter, doubling the growth rate of Google.
Why can the core advertising business flourish? Meta's Chief Financial Officer, Susan Li, explained in a conference call that it is the support of AI technology.
There are two main factors driving the revenue performance: one is the attractiveness of video and information stream recommendations, and the other is improving the monetization efficiency of advertisements, both of which are inseparable from AI's participation.
According to the official statement, it is AI that has driven the significant growth of Meta's core business.
And without a doubt, Meta's ambition in the field of AI is far more than just helping the advertising business grow. It also lies in large models, AI assistants, and Ray-Ban Meta smart glasses, and so on.Zuckerberg revealed that Meta's AI layout will be a long-term and all-round one — even though he is also clear that the commercial value of AI cannot be discussed in the short term, the money that should be spent now cannot be less.
Instead of risking the lagging of infrastructure construction, it is better to be prepared in advance.
Although he did not disclose the specific investment amount for next year, he said it would be a huge amount of money.
Yes, at this stage, AI is really a huge money burner. Just like the account calculated by The Information, even as strong as OpenAI, its loss this year may reach a level of 5 billion US dollars.
But, the market does not seem to worry about Meta.
This is precisely because the company's core business performance is strong.
The reason is very simple, if the core business of a technology company shows weakness, it is natural to worry about the risks of betting on the bottomless pit of AI. Just like Alphabet's YouTube, which is not performing well now, it makes Google's confidence seem a bit weak.
Compared with other technology companies trying to purely engage in AI business, Meta is more competitive because it has this considerable advertising revenue that can be directly "blood transfusion."
Although the increase in costs may make investors feel uneasy, analysts generally believe that Meta's latest financial performance indicates that it can cope with additional costs. 03Exclusive Open Source Strategy
Unlike Google and OpenAI's increasingly "closed" approach, Meta's strategy focuses on open source.
Its Llama series of large models has always held the throne of the strongest open source model in history.
The latest Llama 3.1 with 40.5 billion parameters has further broken historical records.
Although its performance indicators have not completely surpassed the "super large cup" of GPT-4o and Claude 3.5, it is enough to gain public recognition and brush up a wave of favorability.
After all, in today's era where OpenAI is ridiculed as "CloseAI," open source is particularly valuable, especially for such a large-scale model—
A large number of individual researchers, small organizations, and startups benefit from it, enjoying the capabilities of the most advanced large models without the need for the extensive resources required to train a large model from scratch.
Undoubtedly, with the support of the open source strategy—Meta's image has undoubtedly become more impressive.
It is worth mentioning that Meta has a clear understanding of the open source strategy:It's not purely for the benefit of everyone, but more of a business strategy.
In that conversation between Zuckerberg and Huang Renxun, Zuckerberg introduced that, in terms of open source, Meta actually started relatively late.
Why did they start with open source in the first place? It originated from when they began to build distributed computing infrastructure and data centers, Meta found that other tech companies had already laid out their plans. Meta thought they had no competitive advantage in this aspect, so they might as well go open source directly.
What surprised Meta a bit was that the company actually benefited from the ecosystem around it, with the biggest beneficiary being open computing—Meta made public the related server designs, network designs, and even the final data center designs.
And after these designs became industry standards, all the supply chains basically followed Meta's standards, so an open source operation actually saved Meta tens of billions of dollars.
In addition, Zuckerberg also said in the last quarter's earnings call that because Meta has unique data and builds specific product sets, they are not worried at all about open sourcing (especially the Llama series) weakening their core competitiveness.
These are exactly the reasons why Meta has long adhered to the open source strategy for general infrastructure, and it is also the direction they firmly believe in for the company's development.
It is understood that based on this open source strategy, Meta will build a complete general artificial intelligence technology, including future Llama 5, 6, 7.
And the closest to us, Llama 4, is said to be in development, and Zuckerberg revealed that it may need ten times more computing power than Llama 3.
(Well, it seems that we still need to send Huang Renxun a few more leather jackets.)In conclusion, as the financial report data continues to improve, we see Meta is getting back on track, moving away from the shadow of the metaverse and starting to focus wholeheartedly on the field of AI. Driven by the open-source strategy, Meta has shown unique competitiveness and ambition for the future.
This has inevitably led us to have many expectations for it.
No matter what, Zuckerberg has already made bold statements:
By the end of the year, Meta AI will be the most popular application.
AI will completely change all of Meta's products.
Let's wait and see.
04
One More Thing
Starting this year, Zuckerberg's appearance has also changed from the norm.
The common gray T-shirt + jeans is no longer the standard, and the hairstyle has become more trendy.Some netizens sigh, "Zuck is finally not acting like a robot anymore (with a manual dog head emoji)."
There is a view that personal style is a communication tool; our appearance conveys a lot about us and also affects how people perceive us.
For individuals at the level of Mark Zuckerberg, this is even more the case.
So, on one level, can we consider this change in image as a rebranding of the Meta brand? Or does it resonate with the company's fate and future?
Comments