Meta leans on ads as Zuckerberg pushes new AI products

In short: Meta is spending heavily on new AI-related products outside its core ad business, and investors are asking for clearer proof that these bets will pay off.

What's going on

Meta, the company behind Facebook and Instagram, still makes almost all of its money from advertising. The Financial Times says about 98 percent of Meta’s revenue comes from selling ads on its social apps.

Those ad products are doing well. Meta showed more ads than a year ago and also charged more per ad on average. The article also notes that Instagram users are spending more time scrolling.

At the same time, Meta is working on several new lines of business that are not its usual focus. These include “coding agents” (AI tools that can help write software), assistants that can carry out tasks for people, customer service chatbots (automated helpers that talk to customers), and renting out data centers (large buildings full of computers, like warehouses for internet services).

The FT says Meta has not given many details about when these projects will bring in money. On an earnings call, Mark Zuckerberg repeatedly said things would happen “soon.” Meta’s shares fell after results and guidance worried investors, even though the ad business itself looked strong.

What to watch

The biggest question is whether Meta’s new projects can start producing real revenue before costs rise further. Analysts cited by the FT estimate Meta could invest close to $750bn over the next five years as it pursues advanced AI systems. For everyday people, this matters because it can shape what Meta builds next, how many ads you see, and how expensive online services become when companies pour money into massive computing infrastructure.

Source: Financial Times