Metaplatform, the tech giant behind Facebook, Instagram and WhatsApp, is in talks with two AI video generation startups, Pika and Higgsfield. The discussion with PIKA includes potential acquisitions or licensing for technology, but it reportedly has stagnated negotiations with Higgsfield. This strategic move is part of Meta's broader initiative to enhance content generation capabilities for social media applications, smart glasses and virtual reality (VR) services.
Meta's interest in these AI video generation companies is consistent with their continued efforts to integrate AI into their products. This year, META is actively pursuing AI-related transactions. In June, the company acquired a 49% stake in Data Platform Scale AI for nearly $150 million, and appointed the 28-year-old CEO as Meta's AI chief. Additionally, Meta acquired PlayAI, a small AI voice generation startup in July, but the terms of the transaction have not been revealed. Prior to these acquisitions, META had attempted to acquire other AI companies, including bewildered AI, runway AI, and Furiosaai.
In addition to the acquisition, META is actively recruiting high-end AI talent from competitors such as Google, Openai and Apple. The company has established a powerful “Meta Super Intelligence Lab” team by offering substantial reward packages. In July alone, Meta hired multiple researchers from Openai, including some important figures. The company is also recruiting executives from startups and other tech giants to enhance AI capabilities. In particular, Meta recently hired Apple's large language modeling team head with a $200 million compensation package.
To support the Superintelligence initiative, Meta aims to raise $290 million. A significant portion of this funding, $30 million, comes from private corporations, with the remaining $260 million being raised through debt financing. This financial support is crucial to the ambitious plan to invest in Meta's talent, infrastructure, data centers and energy, ensuring a competitive edge in the rapidly evolving AI landscape.
Meta's recent financial performance has been robust, with strong second quarter revenues and third quarter guidance. The company's advertising business continues to grow rapidly, providing the financial foundations needed to support large investments in AI. Meta's second quarter revenue reached $475.2 million, up 22% year-on-year, exceeding market expectations. The company also reported a 38% year-on-year increase in diluted earnings per share. This exceeded market forecasts. Meta expects third quarter revenues to be between $475 million and $505 million, with the midpoint in the range exceeding analyst expectations.
Meta also increased its 2025 capital expenditure forecast, reflecting ongoing investment in talent, infrastructure, data centers and energy. The company expects spending this year to range between $660 million and $720 million. The forecast was adjusted in April due to ongoing trade disputes and AI investments. Meta expects costs to continue to rise next year, particularly in infrastructure and employee compensation.
Despite the short-term impact on profitability, heavy investments in meta in AI are expected to position the company as a leader in the AI sector. The improvements in AI have already contributed to strong performance in the second quarter of the meta, allowing the company to increase the average price of advertising. This strategic focus on AI is likely to drive long-term growth and innovation, solidifying the meta position as a dominant player in the tech industry.
