Could Facebook Change Its Name Again?

• 18 months ago, Zuckerberg bet the future of Facebook on the metaverse, and even changed the company’s name.
• Some analysts are now concerned about Meta spending too much on AI, Zuckerberg’s latest obsession. 
• The company has been buying thousands of pricey Nvidia chips for training AI models. 

Just 18 months ago, Mark Zuckerberg bet the future of Facebook on the metaverse, and even changed the company’s name to Meta. Now, some analysts are worried he may be getting too obsessed with another expensive technology. 

Zuckerberg and other top executives are now spending most of their time on artificial intelligence, the company’s chief technology officer Andrew Bosworth said earlier this month. Boz, as he’s known, was Zuck’s main partner in the doomed Metaverse foray, and some analysts were perturbed by his new comments. 

Bernstein analysts issued a warning a few days after he made them and after meeting with tech investors. “Keep an eye on Zuckerberg’s newfound love with all things AI,” they quipped in a research email. “It seems that the year of efficiency is winding down (we made it to April) and a name change to MetAI (our best guess) is now possible.” Meta’s public relations department did not respond to a request for comment on Monday. 

Investors and analysts only just recovered from the company’s metaverse spending splurge. They now want Meta to stay conservative on costs, and Meta’s massive layoffs, almost one-quarter of the company, appeared to be giving them what they want.

But if Zuckerberg is going to keep up with OpenAI, Microsoft and Google in AI, it’s going to get expensive.

In October, Meta’s CFO said AI would drive “substantially all” of the company’s capital expenditure growth in 2023. Meta has trimmed capex plans a bit since then, but the company has been buying a lot of Nvidia chips, which are needed to train new generative AI models. These components can cost about $10,000 each.

The MetaAI research group used 2,048 A100 Nvidia chips for 5 months to train a new suite of language models, AI industry executive Emad Mostaque tweeted on Friday. 

Since October 25, when Meta said it was investing more heavily in AI, Nvidia shares have more than doubled, while Meta stock is up about 54%. 

Meta reports quarterly results April 26, and Wall Street will be watching the company’s spending and investment plans closely. 

To be sure, AI may help Meta’s core ads and social-media business, while the metaverse was a major diversion.

“On the core business and ads, how do we make more relevant ads?” said Javier Olivan, Meta’s  Chief Operating Officer, at a recent Morgan Stanley conference. “It’s machine learning algorithms, AI.”