Zuck’s revenge: Facebook lives, Llama downloads hit 30m monthly, net revenues top $11.58 billion
CapEx to hit up to $35 billion “with growth driven by investments in servers, including both non-AI and AI hardware
Mark Zuckerberg was widely written off in 2022 after spending billions on a “Metaverse” that nobody wanted to inhabit, for all the press releases and gimmicks in the world. Meta’s earnings this week show a company in rude good health however as it ramps up AI investment --with revenues up 23% on-year to $34 billion and net income up a mighty 164% to $11.58 billion.
Enterprise leaders who had written off Facebook and Meta’s family of applications as routes to reach customers would also do well to reconsider.
Meta now reports 3.9 billion people using at least one of its applications every month, with Facebook and Instagram engagement up by 7% and 6% respectively; something it attributes to AI-driven feed recommendation.
The company is also testing generative AI-made “creative” for advertisers in a sandbox: “As they become more mature, we’ll incorporate them into our ads manager directly” said Meta’s CFO Susan Li in an analyst Q&A.
Meta AI investment: More infrastructure please
“AI” showed up over 70 times on the call, unsurprisingly, but other numbers are more meaningful and genuinely impressive: Meta open-sourced LLaMA, a set of large language models ranging from 7 billion to 65 billion parameters in February 2023 to widespread applause, then followed up with Llama2 in mid-July 2023 – the company said this week that it saw 30 million downloads of the “open source” set of models last month (September 2023) alone.
“AI will be our biggest investment area in 2024, both in engineering and compute resources” said Zuckerberg on the October 25 earnings call, with Li adding she expects 2024 CapEx to hit up to $35 billion “with growth driven by investments in servers, including both non-AI and AI hardware, and in data centers as we ramp up construction” of DCs built with a new architecture.
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Zuckerberg told analysts: “We have a pretty long history of open-sourcing parts of our infrastructure that are not direct product code.. It increases adoption and creates a standard around the industry, which often drives forward innovation faster so we benefit, our products benefit… there's more scrutiny on security and safety-related things so we think that there's a benefit there.
“And sometimes, more companies running models or infrastructure can make it run more efficiently, which helps reduce our costs as well, which is something that we've seen with Open Compute…. CapEx expenses are a big driver of our costs, so any aid in innovating on efficiency is a big thing there.”
Ad impressions meanwhile across its apps rose 31%. Online commerce led ad revenue growth, followed by consumer packaged goods, and gaming.
“Business messaging also continues to grow across our services and I believe will be the next major pillar of our business. There are more than 600 million conversations between people and businesses every day on our platforms” Meta’s CEO said, adding “we’re investing in ways to make it easier for advertisers to adopt our Conversions API, understand its impact, and use it across a broader set of objectives. In addition to our existing support for AWS, in September, we announced the support of Google Cloud for the Conversions API Gateway. We’ve also introduced enhanced reporting and rolled out Conversions API for Business Messaging so click-to-message advertisers can now better understand the value of WhatsApp and Messenger…”
