Debasis Mohapatra
Bengaluru, 3 August 2024
Global technology conglomerate Meta (formerly Facebook) doesn’t expect any significant revenue contribution coming from generative AI in 2024 though adoption of its AI-based offerings sees rising adoption among users.
In its investor call post Q2 earnings, Meta’s management said that RoI (return on investment) on GenAI would take some time before giving returns.
“Gen AI is where we’re much earlier, as Mark (Zuckerberg) just mentioned in his comments. We don’t expect our gen AI products to be a meaningful driver of revenue in 2024. But we do expect that they’re going to open up new revenue opportunities over time that will enable us to generate a solid return off of our investment while we’re also open-sourcing subsequent generations of Llama,” Susan Li, Chief Financial Officer at Meta told investors in the post-results analyst call.
She said Meta is focussed on four primary areas in the GenAI opportunities space, which are to enhance the core ads business, to help it grow in business messaging, the opportunities around Meta AI, and the opportunities to grow core engagement over time.
Meta has already witnessed strong adoption of its Meta AI product across nations with India leading the show.
“People have used Meta AI for billions of queries since we first introduced it. We’re seeing particularly promising signs on WhatsApp in terms of retention and engagement, which has coincided with India becoming our largest market for Meta AI usage,”
Meta’s Founder & CEO, Mark Zuckerberg pointed out that it would take some time before its Meta AI and AI Studio kind of products give revenue contribution.
“So, realistically, for things like Meta AI or AI Studio, I mean these are things that I think will increase engagement in our products and have other benefits that will improve the business and engagement in the near term. But before we’re really talking about monetization of any of those things by themselves, I mean I don’t think that anyone should be surprised that I would expect that that will be years..,” Zuckerberg said.
Meta reported sales of $39.1 billion for the quarter ended June 2024 while strong revenue growth drove a 9-point rise in its operating margin to 38 per cent. Its ad revenue grew strongly in the second quarter. Within ad revenue, the online commerce vertical was the largest contributor, followed by gaming and entertainment and media.
