Why Investors Are Confused with Meta AI's Strategy
Before the hype in artificial intelligence accelerated, Meta Platforms (META) invested heavily in the metaverse. Its ticker, META, is a relic of that decision. The firm quickly pivoted to AI in the last three years.
More recently, Meta offered an AI researcher over $1 billion to join its superintelligence team. The superintelligence department offers no clues to shareholders on how it is better than the competition. The salary offering, however, increases costs for competitors. Expect ChatGPT, Microsoft (MSFT), and Apple (AAPL) to pay more for talented leaders.
Restructuring Rumors
Meta is reportedly pausing staff hiring in its AI division. After adding over 50 researchers and engineers, the costs might become an issue. Assuming an average compensation package of $100 million, the added cost is $5 billion. Even more concerning is the lack of cohesiveness in each sub-division in the AI unit. Without a unified goal among the four segments – superintelligence, AI products, AI infrastructure, and long-term research group – competitors might outflank Meta.
Other potentially talented leaders may choose to join Google, Anthropic, OpenAI, and Microsoft instead. They might want to work in companies that have a clear AI product that will dominate the marketplace.
Appealing infrastructure firms to invest in include CoreWeave (CRWV), Cisco Systems (CSCO), and Hewlett Packard Enterprise Company (HPE).
