Meta, formerly known as Facebook, has been investing heavily in artificial intelligence (AI) with hopes of driving revenue growth in the future. The company’s CEO, Mark Zuckerberg, has been vocal about the positive impact AI has had on Meta’s performance in the digital advertising market. With the recent second-quarter earnings report showing better-than-expected results, it’s clear that AI is playing a significant role in Meta’s success.
Despite skepticism from investors about Meta’s massive spending on AI, Zuckerberg and finance chief Susan Li have highlighted the ways in which AI has helped the company outperform its competition. The implementation of AI has resulted in improved recommendations, better content discovery, and more effective advertising experiences for users. This has translated into revenue growth of 22% from a year earlier, with 98% of sales coming from advertising on platforms like Facebook and Instagram.
Zuckerberg pointed to AI as the foundation behind Meta’s refreshed online advertising platform, which faced challenges after Apple introduced an iOS privacy update in 2021. By utilizing AI to rebuild their ad tech stack and enhance user engagement, Meta was able to overcome these obstacles and drive revenue and profits. Industry analysts have praised Meta’s strategic use of AI, with Mark Mahaney from Evercore ISI recommending buying Meta shares due to their successful integration of AI.
While Meta has already seen returns on their AI investments in the short term, the company is continuing to allocate significant resources towards AI research and product development efforts. Meta’s CFO, Susan Li, mentioned that they expect significant CapEx growth in 2025 as they focus on AI and the metaverse. By investing in both core AI and generative AI, Meta aims to improve its advertising platform, increase user engagement, and drive future revenue gains.
Meta’s success in leveraging AI to drive revenue growth serves as a model for other tech companies looking to innovate in the digital advertising space. Despite initial skepticism, Meta’s strategic investments in AI have paid off with strong financial performance and optimistic forecasts for the future. As the company continues to integrate AI across its ecosystem, it is clear that AI will play a crucial role in Meta’s ongoing success.