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Dow Jones NewsJan 30, 1:11 AM UTC
MW Forget DeepSeek. Zuckerberg says Meta will spend hundreds of billions on AI.
By Emily Bary
Meta's CEO says its consumer AI offering 'is going to be one of the most transformative products that we've made'
For those who were thinking Meta Platforms Inc. might back down from its heavy-spending ways in the wake of the DeepSeek news, think again.
Not only did Meta (META) stand by its forecast for $60 billion to $65 billion in capital expenditures this year, which Chief Executive Mark Zuckerberg first shared on Facebook last week, but management also vowed to keep spending big on artificial intelligence in the years to come.
See also: Zuckerberg wants to spend billions more on AI. Meta investors like that idea.
On the earnings call, Zuckerberg spoke of "the hundreds of billions of dollars" Meta will invest in AI infrastructure over the long term.
Meta shares rose 2.3% in the extended session, following a mixed combined slate of results and guidance.
Zuckerberg added that he often says each year will be a big one, but "more than usual, it feels like the trajectory for most of our long-term initiatives is going to be a lot clearer by the end of this year." He sees the big AI spending as a support for the company's goal of getting Meta AI, a consumer AI offering, into the hands of over a billion users by the end of 2025.
"I continue to think that this is going to be one of the most transformative products that we've made," he said.
Meta's upbeat tone on AI helped outweigh muted guidance for the first quarter. The culprit: a strong U.S. dollar, which is bound to be a source of pressure for other big companies with international businesses who've yet to report earnings this season. Meta expects sizable headwinds related to currency.
The company is calling for $39.5 billion to $41.8 billion in revenue for the first quarter, with the midpoint of that range trailing the consensus view. Analysts tracked by FactSet were looking for $41.7 billion.
Analysts noted ahead of the report that the strengthening dollar could impact Meta's revenue guidance. Meta expects an impact of 3 percentage points, the company said in Wednesday's release.
That said, Meta's fourth-quarter report had some financial highlights. Overall revenue rose 21% to $48.4 billion in the latest period, whereas analysts were modeling $47.0 billion. The company saw a 6% boost in advertising impressions and a 14% rise in the average price per ad.
Before Meta's earnings came out, the Wall Street Journal reported that the company agreed to settle a suit with President Donald Trump regarding the suspension of his account after the riot at the U.S. Capitol in January 2021. Most of the $22 million settlement will go toward Trump's presidential library, according to the report, which cited confirmation from a Meta spokesperson.
-Emily Bary
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01-29-25 2011ET
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