Meta’s push into AI is changing how advertisers and investors judge the company, even as short-term costs raise fresh questions about timing and returns.
The company has rolled AI into advertising and consumer products, and early signs suggest it is improving advertiser outcomes. Automated tools have boosted conversion rates, and some Advantage+ Shopping campaigns report lower cost per purchase. Analysts say the AI advertising suite is running at an annualized pace above $60 billion, a level that could anchor a large share of Meta’s ad business if it holds.
To fund the expansion, Meta raised about $29 billion in bonds, which could add roughly $2.3 billion a year in interest expense. Analysts view the borrowing as manageable, but it increases pressure for AI projects to deliver measurable returns.
Meta’s huge user base is a key advantage for its recommendation systems. Open-source work around Llama and growing enterprise partnerships widen the company’s paths to revenue, from licensing to premium AI services hosted with cloud partners like Amazon Web Services.
As far as consumers are concerned, Meta AI and its products with wearables, including Ray-Ban smart glasses, enable new possibilities on how people may connect, and this would eventually lead to some cash flow.
Nonetheless, there are still genuine challenges the firm can face: Tough competition with Alphabet and OpenAI, additional regulations on data, and a struggle to attract and retain the best AI personnel.
The next product rollouts and quarterly results will be the real test of whether heavy AI spending converts into sustained revenue and profit growth. Stakeholders and advertisers will watch execution closely over the coming quarters.
