Meta Platform’s (META) unit focused on artificial intelligence Reality Labs will continue posting losses until next year. That’s the sentiment echoed by Chief Executive Officer Mark Zuckerberg after the unit delivered an operating loss of $4.4 billion in the recent quarter. The losses should widen heading into year-end as the unit is on course to consume $100 billion.
$100B AI Investment
The $100 billion spending on artificial intelligence is increasingly putting pressure on the company’s advertising business. With increased spending, Meta is not planning to go slow on AI spending, as the technology is seen as a key ingredient in reframing the social networking juggernaut.
The parent company behind Facebook and Instagram has turned to artificial intelligence to enhance its arsenal of products as it seeks to enhance user experience and engagement levels. As part of that shift, Meta has created several essential AI products, such as AI-powered smart glasses, an assistant integrated into its various social apps, and large language models that drive chatbots.
Zuckerberg claimed that Llama 4, the massive language model that underpins Meta’s AI products and services, will be quicker, more potent, and more affordable than its predecessors. Meta is already working on the next iteration of Llama.
Meta has relied on AI developments to enhance its ad targeting and content recommendations, which have directly affected business outcomes. As part of a larger plan to boost engagement and keep users scrolling, the company has changed its algorithms to display more content from sources other than their friends and family.
The amount of time spent on Facebook and Instagram has increased by 8% and 6%, respectively, due to AI-driven feed and video recommendations. AI developments significantly influence those suggestions, enabling the business to forecast user preferences more precisely.
The investments are already having A significant impact as the company has successfully attracted billions of dollars in advertising revenues to support the financing spree. The company expects between $45 billion and $48 billion for the current quarter.
AI Fuelling Gas Demand
Meanwhile, the artificial intelligence revolution is welcome for gas pipeline companies amid the push to combat carbon emissions. The AI revolution is fuelling increased gas demand to meet artificial intelligence and data center needs.
Data centers for artificial intelligence, computer chip factories, and an increasing number of electric vehicles are causing utilities to prepare for the biggest surge in power demand in a generation. Solar and wind energy will contribute to that extra power. However, a sizable amount will come from gas-fired power plants. Additionally, data center operators want to ensure that gas will be accessible and readily available when needed.
About 45 power plants that Energy Transfer LP Co. does not currently service have requested connections. Additionally, it has received requests from over 40 potential data centers across ten states. The proximity of pipelines and the cost of connecting to them are important factors for many developers in determining the best places to build.
Richard Kinder, chairman of Kinder Morgan (KMI), expects the demand for gas from data centers and artificial intelligence to be tremendous. Additionally, the company anticipates significant growth from gas shipments to Mexico and liquefied natural gas exports.
