The student news site of Carlmont High School in Belmont, California.

Scot Scoop News

The student news site of Carlmont High School in Belmont, California.

Scot Scoop News

The student news site of Carlmont High School in Belmont, California.

Scot Scoop News

Meta’s stock falls following plans for AI investment

Kian Bhatt
Meta’s stock plummeted Thursday as the company warned of years of AI investment.

Meta shares plummeted Thursday after the CEO, Mark Zuckerberg, announced plans to “invest aggressively” in artificial intelligence, scaring investors. It was Meta’s worst trading day in 18 months, as the stock fell around 15% when the Nasdaq opened.

The company’s market value declined by approximately $183 billion. 

Meta has been transitioning in recent years, trying to position itself as poised to capitalize on artificial intelligence (AI). Meta’s Chief Executive Officer, Mark Zuckerberg, has invested in advancing AI technologies, many of which have improved the company’s advertising systems and boosted its revenue.

As Meta ramps up AI investment, the company anticipates that the second-quarter revenue will be at $36.5 billion to $39 billion, missing analysts’ expectations of $38.2 billion.

Meta has already invested billions in AI development. On Wednesday, the company announced it would spend $40 billion this year, primarily for data centers, chip designs, and research. Additionally, Meta increased its capital expenditure forecast for 2024 by up to $10 billion to account for its AI investments. 

Meta isn’t the only company ramping up AI investments. Google and Microsoft also told investors that they are planning to spend billions of dollars quarterly to improve AI products. However, Google and Microsoft saw different reactions compared to Meta.

Shares of Microsoft and Google jumped after implying that the spending was to account for increased demand for their AI products.

Microsoft said it plans to spend $14 billion a quarter while it builds out its AI. The company expects its spending to increase in subsequent quarters.

Google’s Chief Financial Officer Ruth Porat said that Google’s $12 billion capital expenditure in the first quarter was expected to remain at or above that level.

A majority of Meta’s investments will be going to one of its main AI projects, Llama.

Llama is a large language model (LLM), which is implemented on the company’s social media platforms. Meta recently announced the rollout of Llama 3, the open-code large language model that underpins the Meta AI assistant tool, which is now widely accessible on its flagship social media platforms. Llama 3 is open source, meaning that the LLM is free to the public.

Zuckerberg explained the reasoning behind making Llama an open-source model in the Meta earnings call for the fourth quarter of 2023. To see Zuckerberg’s explanation, read the link attached: Meta Earnings Call.

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About the Contributor
Kian Bhatt
Kian Bhatt, Staff Writer
Kian Bhatt is a junior at Carlmont High School, and this is his first year in Carlmont's journalism program. Kian plays varsity water polo and also swims for Carlmont. Outside of high school, he enjoys hanging out with friends, hiking, and traveling.

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