Meta Platforms (META) – Zuck AI Announcements – January 20, 2024

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Meta Platforms (META) – Zuck AI Announcements – January 20, 2024


Zuck took to social media this week to update investors on Meta’s latest developments in AI and the metaverse. Meta will consolidate AI research teams to “support the long term goal of building general intelligence, open sourcing it and making it available to everyone.” He reiterated that Llama3 (its latest and greatest foundational model) will be open-sourced as well. Surely developers will be eager to get their hands on it to build new applications and optimizations on top of it. That’s the beauty of open source and its push to commoditizing foundational models. If you can give developers best-in-class tools and compelling incentives, such as Llama3 and Quest (yes, Quest), they will flock to your ecosystem. As that happens, the cost of innovation and community-driven optimization briskly falls. Furthermore, adoption is boosted as its lower cost models and headsets flood the market. That traffic reinforces a positive feedback loop in which even more 3rd party developers are attracted to building on the platforms that the world is actually using.

This will make Meta among the most efficient foundational model and AI players. It’s outsourcing a great deal of internal innovation to the best 3rd party developers in the world. That’s the playbook here and is the same path this company took with its social media apps. Why make a few million when you can keep things free, build a user base of half the world and monetize elsewhere for billions upon billions in profits? Meta continues to take this long term approach and says it’s doing so to “let more people benefit.” While that’s true, more people benefitting is simply a byproduct of Meta benefitting more down the road. To support its vast GenAI ambitions, Zuck announced that Meta will have 350,000 Nvidia H100 GPU chips by the end of 2024 and 600,000 H100 compute equivalents from competitors such as AMD (most likely). For context, 350,000 Nvidia H100 chips cost about $14 billion with no volume discounts. Finally, Zuck told us that the new Ray Ban smart glasses are off to a “very strong start.” Vague, but I still love to hear it.

Source: YCharts

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