Meta, AKA “The Artist Formerly Known As Facebook,” announced that they just lost $21 billion on their Reality Labs division, AKA the Metaverse, AKA the worst virtual reality environment since January 2022.
Meta’s second-quarter earnings showed that Reality Labs, its virtual and augmented reality development business, has lost a staggering $21.3 billion since January 2022 — and executives warned the bleeding will only get worse.
The unit recorded $276 million in Q2 sales this year — down from the $339 million it drew in during Q1, underscoring how VR and AR technology has yet to infiltrate the mainstream.
The losses were wider than analysts expected, though CFO Susan Li suggested in the report that Meta will continue to invest in the tech, which is used to power the metaverse.
“For Reality Labs, we expect operating losses to increase meaningfully year-over-year due to our ongoing product development efforts in augmented reality/virtual reality and investments to further scale our ecosystem,” Li wrote.
Just last month, Meta unveiled its Quest 3 headset for $499, which Mark Zuckerberg touted as “the first mainstream headset with high-res color mixed reality,” though it’s unclear how successful the tech has been so far.
Hint: Not at all.
Just how do you lose $21 billion? That’s a burn rate of over a billion a month. You could hire a mountain of developers and engineers for that money, maybe 100,000 or so of them even at California salary rates. Wikipedia (usual caveats apply) says Occulus only had 17,00 employees in 2022. Meta only paid $2 billion to acquire Occulas (which became Reality Labs) in the first place. Hell, you could fund over 200 startups at $100 million a pop, and it would still be more likely for any one of them to be profitable than Reality Labs.
Usually you have to be a politician to lose that much money. I wonder if Reality Labs losses might be covering up losses in other divisions. Or if the money is getting siphoned off to somewhere else entirely…
Earlier this month, Meta found itself on the defense in a copyright infringement lawsuit filed by stand-up comic Sarah Silverman and authors Christopher Golden and Richard Kadrey, who alleged that Meta’s artificial intelligence-backed language models were trained on illegally-acquired datasets containing the authors’ work.
The suit against Meta points to the allegedly illicit sites used to train LLaMA, the ChatGPT competitor the company launched in February.
Naturally, anything involving large corporations ripping off science fiction writers attracts my attention, and I used to bump into Kadrey back when I was on the SF con circuit. The same firm is also suing on behalf of Paul Tremblay and Mona Awad.
There probably needs to be some sort of regulation on how much AI generated content can come from any particular living creator. If I feed an AI all of Paul McCarthy’s songs, and ask it to produce a new one based on those, is it copyright infringement?
I suspect a number of lawyers are going to be getting a lot of money off AI in the near future…
Tags: AI, California, ChatGPT, Facebook, Mark Zuckerberg, Media Watch, Occulus, Reality Labs, Richard Kadrey, Sarah Silverman, science fiction, technology
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Mr. Person asks how Meta/Reality Labs could lose $21 billion. It’s a good question, and I have another one: from where did the $21 billion come?
If I were a Meta shareholder, I’d want to know the answer to question #2, because that’s $21 billion that could have been used, for example, to provide me as a shareholder with quarterly dividends. Or used to build up the core businesses. And so on. That $21 billion came from the other divisions of Meta — how are those divisions doing? Couldn’t they use the re-investment?
One wonders how long before the shareholder suits…
Mark ZuckerSperg is a Lizardian mainframe supervisor who bought his private island because his species needs to be in close proximity to the water they’re stealing from our oceans.
Prove me wrong!
Agree squandering $21 billion is an amazing amount. Guessing the spend was some mix software and some hardware research. Is there no residual value? Was anything accomplished? I am not clear what Meta’s objectives actually are. Are they making progress or simply pouring in money and expecting something beneficial to result? Was there any direction to the spend or did they just give a million monkeys a million debit cards?
Jeff said, “I am not clear what Meta’s objectives actually are.”
To serve as an in-kind contributor of propaganda and a public relations mill for the DNC. Totally not a joke. Just like Sam Bankman-Fried and FTX was a money laundering conduit for the DNC, not a horribly inept billionaire running a crypto exchange.
The deep state is real. So is “deep corporate”.
I’ve always suspected that Zuckerberg was a front for the CIA or some other outfit like the NSA.
Note the way FakeBook managed to push Myspace out of the social media niche; I’ve heard rumors that a lot of that was due to the fact that Myspace refused to play ball when it came to violating user privacy. Market forces coupled with support from the existing powers in society?
In any event, the whole FakeBook ecosystem seems almost designed as a social monitoring scheme. The entities don’t need to do the work, if everyone is voluntarily posting their personal business on their account. For free.
I’ve always objected to things like FakeBook on the basis that in any “free service” situation, you’re actually the product, and you’re effectively selling yourself for nothing. Not a smart model, but it’s made Zuckerberg billions.
Where the wasted money has gone? No idea, but I’d be looking at “political influence” first. Or, siphoned off somewhere.
A Meta shareholder revolt isn’t something that can happen; it’s structured such that Mark Zuckerberg owns more than half of the voting shares. Zuck remembered Jobs getting the boot from Apple and wasn’t having any of that.
My first thought, remember the whine of how the billionaires who perished on the OceanGate submersible could have spent their money to benefit the lives of others? Now do Zuckerberg and Meta.
But then, I recall how almost anyone that fancies themselves in the DC/London/NYC/California elite, left or right, will make some comment about how misguided Elon Musk is wasting his money on a narcissistic trip to Mars. Starship development is about $3 billion (if you believe Wikipedia). I think Elon is quite reasonable with his money.