Can AI save Zuckerberg's Metaverse?

Metaverse division of Meta books another billion-dollar loss. Will Mark Zuckerberg be right with his promise of a new future? Let’s take a closer look at the numbers.

Mark Zuckerberg’s Metaverse and his Web3 vision devours billions of US dollars every month - and barely generates revenue. This was also the case in the second quarter of 2023: The Reality Labs division posted a loss of US$3.7 billion, according to data from the quarterly report. Since 2020, operational losses have thus exceeded US$33 billion. However, the founder of Meta (formerly Facebook) remains optimistic about the future.

To advance Mark Zuckerberg’s vision, Meta increasingly relies on artificial intelligence. "We have been working on these two major priorities in parallel for many years now. In many ways they overlap and complement each other," Zuckerberg said in a statement about the results.

Metas Metaverse: A losing proposition

So far, the huge expenditure cannot be justified by a particularly impressive Metaverse; it is rather the opposite. As the Wall Street Journal reports, a large proportion of users would lose interest in the digital world after the first month.

According to estimates, there are just under 200,000 users on the American company’s Metaverse - a fraction of the 3.6 billion users Meta unites on its social media platforms. New in Mark Zuckerberg’s repertoire: the supposed Twitter killer called Threads. Zuckerberg, however, is attached to his Metaverse. He is following an ambitious, long-term and layered roadmap:

Reality Labs’ portfolio includes many components in VR, AR, Metaverse, social media and interfaces to connect them. We have a long-term horizon to assess the return on our investment. - Zuckerberg

However, the 39-year-old cannot guarantee that he will be proven right with this promise, the report added. Zuckerberg also explained the various trends in consumer technology. His conclusion: an "immersive" version of the Internet will have to become the norm in the coming years. People with visual impairments, for example, will no longer have a ‘ordinary’ need to wear glasses. "I think in the future all [glasses] will be smart glasses," said the billionaire.

Success with artificial intelligence?

Artificial intelligence, better known as AI, should help implement this new Internet. In February, the company established a new team for generative AI technology. Mark Zuckerberg is putting a lot of emphasis on this area, according to Meta CTO Andrew Bosworth. Generative AI is also intended to help implement the company’s Metaverse plans.

Right now, however, Meta’s own Metaverse is still in its infancy and burning considerably more money than it makes. The next few years will show whether Mark Zuckerberg’s billion-dollar push toward Web3 is a stroke of genius or was merely a pipe dream.

Apart from this, Meta managed to exceed investors’ expectations. The company’s total revenue for the second quarter of 2023 was about $32 billion, better than forecast. Meta’s share price rose nearly 10 percent in after-hours trading and at the time of writing is quoted $292 per share.