Meta’s Mark Zuckerberg seems surprised by the pace of AI spending | Wilnesh News

Yuan Huge data centers and computing infrastructure are being built for artificial intelligence projects at such a pace that even CEO Mark Zuckerberg is a little surprised.

On Wednesday, following Meta’s third-quarter earnings report, Zuckerberg explained to investors on a conference call with analysts that Meta’s rising costs this year are tied to the speed at which employees can acquire data centers, servers and artificial intelligence chips. relation.

“We came into the year with a set of things we thought we could do, and we’ve been able to do more than we hoped for and expected at the beginning of the year,” Zuckerberg said.

It also means investors have to bear higher fees. Meta raised the lower end of its 2024 capital spending guidance to $38 billion from $37 billion. The cap remains at $40 billion.

“I’m actually pleased that the team executed well,” Zuckerberg said. “This execution makes me even more optimistic that we will be able to continue to build this program at a good pace.”

Spending, including the purchase of billions of dollars worth of Nvidia graphics processing units, will increase significantly in 2025, Meta added.

Meta shares fell in after-hours trading Wednesday despite the company’s poor earnings and revenue performance. Lower-than-expected user growth and rising costs are also part of the concern.

During the earnings call, Barclays analyst Ross Sandler asked Zuckerberg how quickly Meta could be deployed, given possible obstacles such as energy requirements and the time it would take to develop its own custom AI-specific chips. Speed ​​builds the massive computing infrastructure needed to achieve its goals around generating artificial intelligence.

Zuckerberg responded by praising Meta’s infrastructure team, which he said has “executed really well” in building more computing power for various artificial intelligence projects such as the Llama series of large language models.

Wall Street is increasingly worried about tech giants like Meta and letter Spending too much on infrastructure without seeing immediate returns. Zuckerberg acknowledged this theme in an interview with Bloomberg in July, telling Emily Chang that the company was in danger of “overbuilding right now.” However, he said the risk of underinvestment was too great.

“In the short term, the formula around infrastructure may not be what investors want to hear, and we’re growing infrastructure,” Zuckerberg said on Wednesday. “But, I just think the opportunity here is really great and we’re going to continue to be there. We’re making a lot of investments and I’m proud of the teams that are doing a great job to maintain a lot of capacity so that we can deliver world-class models and world-class products.

This isn’t the only place where investors have to endure huge fees.

Meta’s Reality Labs division, the birthplace of Metaverse technology, suffered an operating loss of $4.4 billion in the third quarter. The company said it expects “operating losses to increase significantly year over year in 2024 due to our ongoing product development efforts and investments to further expand our ecosystem.”

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