The social media giant meta platform says its profits have skyrocketed, putting billions of dollars into artificial intelligence (AI) projects.
The company owns Facebook, Instagram and WhatsApp, revenues for the three months ended June rose 22% from the same period last year, up 2018,000, to $47.5 billion (£35,860 million), while profits rose 36% to $18.3 billion.
At the same time, costs have also risen (up 12% to $27 billion). The company is throwing money to fulfill CEO Mark Zuckerberg's AI ambitions, and its spending is expected to continue to increase.
Meta says the biggest cost is the cost of building infrastructure, including servers and data centers, and the wage package for workers.
Before Meta's earnings announcement on Wednesday, Zuckerberg posted a video on Instagram, explaining his plans to develop something called “AI Superintelligence,” “beyond human intelligence to solve complex problems.”
He also said that Meta will create “personal super intelligence” that uses advanced AI for everyday tasks such as reservations and gift orders after users remember their wedding anniversary.
Mike Proulx of research and advisory firm Forrester said Meta supports “the basis for the future as a future growth company” in the event of current products decline.
After releasing the Llama 4 Family of Lager Language Models (LLMS), Meta has been aiming to catch up with rival artificial intelligence developers like Openai and Google after some users and investors were disappointed.
To seduce them from their competitors, they offer top AI talent a $100 million salary package.
Meta also spent more than $14 billion on stake in artificial intelligence company Scaleai and brought in chief executive Alexandr Wang to support its efforts.
Zuckerberg's strategy was to use the strength of Meta's core business to fund AI projects.
He said 3.4 billion people around the world use at least one meta app every day.
Meta has also deployed AI to improve its advertising business.
However, the cost of developing super intelligence has sparked concern among some analysts.
“AI-led investment in Meta's advertising business will continue to pay off and will bolster revenues as the company pours billions of dollars into tension-like AI ambitions,” Minda Smiley said.
“However, Meta's exorbitant spending on AI's vision will continue to lead questions and scrutiny from investors eager to see returns,” she added.
Meta's shares rose more than 10% in extended transactions in New York after earnings were announced.
