Meta’s CEO, Mark Zuckerberg, has encouraged skeptical investors to consider the present benefits of the company’s substantial investment in AI, following Q2 earnings reports that showed better financial performance than many investors expected.
After the release of the earnings report, Zuckerberg and CFO Susan Li highlighted AI’s role in outpacing competition in the digital advertising market.
Meta’s share price increased by around seven percent following the report, with a positive forecast for Q3 contributing to the rise.
Zuckerberg noted that AI enhances content recommendations and advertising effectiveness, with existing AI-driven products already performing at scale.
The company also reported a 22% revenue growth to US$39.07bn (£30.6bn), largely from advertising on Facebook and Instagram, doubling Google’s ad business growth of 11%.
Smaller competitors Pinterest and Spotify reported revenue growths of 21% and 20%, respectively.
Li attributed Meta’s advertising success to strong performance in online commerce, gaming and media sectors, particularly in the Asia-Pacific region.
She emphasised that AI improvements in ad performance have boosted ad prices despite regional growth slowdowns. Zuckerberg credited AI for revitalizing Meta’s advertising platform after Apple’s 2021 iOS privacy update.
The company is heavily investing in Nvidia’s GPUs for AI model training, anticipating future revenue from generative AI advancements.
Li projected significant capital expenditure growth in 2025 to support AI research and development. While generative AI won’t drive substantial revenue in 2024, it is seen as opening future revenue opportunities.
The good news comes amid several legal actions launched against the company related to data privacy.
This week, Meta also reached a US$1.09bn (£854m) settlement in a Texan lawsuit, which alleged it was stealing users’ biometric data without consent.
What’s more, the company faces another major lawsuit in New Mexico, where the state attorney general has sued Meta, alleging that it failed to protect children and young users from sexual exploitation.
