Meta has bet big on artificial intelligence. On Wednesday, it said that bet would not let up.<\/p>\n
The Silicon Valley company, which owns Facebook, Instagram and WhatsApp, increased the lower end of its capital expenditure forecast for the year to $130 billion, up from its $125 billion projection in April. Much of that investment will go to building data centers<\/a>, the computing facilities that power A.I.<\/p>\n Meta also said its costs and expenses rose faster than its revenue growth for the second quarter. Revenue was $60.8 billion, up 28 percent from a year earlier, while costs jumped 55 percent to $42 billion. Profit was $18.3 billion, down 14 percent from a year earlier.<\/p>\n Mark Zuckerberg, Meta\u2019s chief executive, focused on how A.I. was aiding his company\u2019s businesses, including its digital advertising.<\/p>\n \u201cWe are now at a point where our investments in A.I. are accelerating every major part of our core business,\u201d he said. He added that \u201cpotentially selling compute directly,\u201d which refers to computing power, could be a new business opportunity.<\/p>\n But investors appeared to be spooked by Meta\u2019s rising expenses. The company\u2019s stock fell more than 9 percent in after-hours trading.<\/p>\n Meta\u2019s continued spending follows Google\u2019s announcement last week that it would raise its capital expenditures. Big tech companies<\/a> are expected to pay $1.5 trillion on building data centers this year and next year. The enormous sums have raised questions about whether such spending is justified, with the stock market gyrating over concerns about the outlays in recent weeks.<\/p>\n Mr. Zuckerberg previously said Meta was considering selling computing power from its data centers to other companies. In June, Anthropic offered<\/a> to buy computing power from Meta in a deal that could be worth up to $10 billion; the talks are ongoing.<\/p>\n Unlike Google, Amazon and Microsoft, which are also spending on A.I. data centers, Meta is without a business that lets companies rent computing power and A.I. tools.<\/p>\n People think A.I. spending \u201cis supposed to slow down, but who\u2019s going to be the first company to blink?\u201d said David Wagner, the head of equity at Aptus Capital Advisors. <\/p>\n Meta\u2019s shift from a social media company to an A.I. firm has not been smooth. This month, it removed a feature that let people make A.I. images of one another<\/a> on Instagram just days after its release because of a backlash over privacy concerns, among other snafus.<\/p>\n But the company has made progress developing its own A.I. models. This month, Meta released the latest version<\/a> of Muse Spark, its most advanced A.I. model developed under Alexandr Wang, the company\u2019s chief A.I. officer. It also introduced an A.I. image generator, Muse Image<\/a>, and plans to release a video generator in the coming months.<\/p>\n Muse Spark still trails other A.I. models in benchmarks that measure coding, reasoning and writing. Meta plans to release a more powerful model, code-named Watermelon, this fall.<\/p>\n In recent days, Mr. Zuckerberg has also gone on the attack<\/a> against companies like Anthropic and OpenAI in defense of open-source A.I. models<\/a>, which are freely available for others to build upon. In an interview<\/a> with The New York Times on Tuesday, he said tightly controlling A.I. development would be \u201cabandoning our values\u201d and would stifle innovation.<\/p>\n Meta also faces ongoing litigation over claims that its social media products are addictive and said it spent $2.4 billion on legal fees in the second quarter. It lost the first of nine bellwether addiction<\/a> trials in March but gained a reprieve this month after one plaintiff, a 15-year-old from Florida, dropped his suit<\/a>.<\/p>\n Meta\u2019s A.I. smart glasses continue to be a bright spot. Its Reality Labs division, which develops those glasses, generated $431 million in revenue in the quarter, up 16 percent from a year earlier. The division lost $4.6 billion, about the same as a year earlier.<\/p>\n Meta\u2019s family of apps grew to 3.6 billion users, up 3 percent from a year earlier.<\/p>\n","protected":false},"excerpt":{"rendered":"Meta has bet big on artificial intelligence. On Wednesday, it said that bet would not let up. 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