Mark Zuckerberg, CEO of Meta Platforms Inc, stated on Wednesday that artificial intelligence is assisting the firm in increasing traffic to Facebook and Instagram and earning more in ad sales.
In after-hours trading, Meta shares rose 12%, increasing more than $50 billion to its market value and continuing a rise in tech stocks that began after Google parent Alphabet Inc and Microsoft reported good results on Tuesday.
Meta reduced its cost outlook for the year, saying expenses could be lower than the firm forecasted in March, and also outperformed expectations for first-quarter profit and revenue, which increased for the first time in nearly a year.
The company, which has been hesitant to implement AI-friendly hardware and software systems for its core business, has undertaken multiple costly overhauls to strengthen its core business, including a large effort to increase AI capacity.
“At this point, we are no longer behind in building out our AI infrastructure,” Zuckerberg stated on a conference call.
“And to the contrary, we now have the capacity to do leading work in this space at scale.”
According to Meta, AI suggestions increased time spent on Instagram by 24% in the January-March quarter.
“I think similar to Alphabet, a lot of Meta’s AI investments have gone into the advertiser side,” said James Cordwell, an analyst at Atlantic Equities.
Meta has also begun an aggressive cost-cutting campaign, with plans to remove 21,000 people and flatten its middle-management structure in order to meet Zuckerberg’s aim of making 2023 the “year of efficiency.”
