Meta's Bold Leap: Zuckerberg's $100 Billion Gamble on AI Superintelligence

Meta Swears This Time Is Different

The tech giant has floundered on AI. Now it's going all in on a "superintelligence" team. Mark Zuckerberg was supposed to win the AI race. Eons before ChatGPT and AlphaGo, when OpenAI did not exist and Google had not yet purchased DeepMind, there was FAIR: Facebook AI Research. In 2013, Facebook tapped one of the "godfathers" of AI, the legendary computer scientist Yann LeCun, to lead its new division. That year, Zuckerberg personally traveled to one of the world's most prestigious AI conferences to announce FAIR and recruit top scientists to the lab. FAIR has since made a number of significant contributions to AI research, including in the field of computer vision. Although the division was not focused on advancing Facebook's social-networking products per se, the premise seemed to be that new AI tools could eventually support the company's core businesses, perhaps by improving content moderation or image captioning. But for years, Facebook didn't develop AI as a stand-alone, consumer-facing product. Now, in the era of ChatGPT, the company lags behind. Facebook, now called Meta, trails not just OpenAI and Google but also newer firms such as Anthropic, xAI, and DeepSeek -- all of which have launched advanced generative-AI models and chatbots over the past few years. In response, Zuckerberg's company quickly launched its own flagship model, Llama, but it has struggled relative to its competitors. In April, Meta proudly rolled out a Llama 4 model that Zuckerberg called a "beast" -- but after an experimental version of the model scored second in the world on a widely used benchmarking test, the version released to the public ranked only 32nd. In the past year, every other top AI lab has released new "reasoning" models that, thanks to a new training paradigm, are generally much better than previous chatbots at advanced math and coding problems; Meta has yet to deliver its own. Read: Chatbots are cheating on their benchmark tests So, a dozen years after building FAIR, Meta is effectively starting over. Last month, Zuckerberg went on a new recruiting spree. He hired Alexandr Wang, the 28-year-old ex-head of the start-up Scale, as chief AI officer to lead yet another division -- dubbed Meta Superintelligence Labs, or MSL -- and has reportedly been personally asking top AI researchers to join. The goal of this redo, Zuckerberg wrote in an internal memo to employees, is "to build towards our vision: personal superintelligence for everyone." Meta is reportedly attempting to lure top researchers by offering upwards of $100 million in compensation. (The company has contested this reporting; for comparison, LeBron James was paid less than $50 million last year.) More than a dozen researchers from rival companies, mainly OpenAI, have joined Meta's new AI lab so far. Zuckerberg also announced that Meta plans to spend hundreds of billions of dollars to build new data centers to support its pursuit of superintelligence. FAIR will still exist but within the new superintelligence team, meaning Meta has both a chief AI "scientist" (LeCun) and a chief AI "officer" (Wang). At the same time, MSL is cloistered off from the rest of Meta in an office space near Zuckerberg himself, according to The New York Times. When I reached out to Meta to ask about its "superintelligence" overhaul, a spokesperson pointed me to Meta's most recent earnings call, in which Zuckerberg described "how AI is transforming everything we do" and said that he is "focused on building full general intelligence." I also asked about comments made by an outgoing AI researcher at Meta: "You'll be hard pressed to find someone that really believes in our AI mission," the researcher wrote in an internal memo, reported in The Information, adding that "to most, it's not even clear what our mission is." The spokesperson told me, in response to the memo, "We're excited about our recent changes, new hires in leadership and research, and continued work to create an ideal environment for revolutionary research." Meta's superintelligence group may well succeed. Small, well-funded teams have done so before: After a group of former OpenAI researchers peeled off to form Anthropic a few years ago, they quickly emerged as a top AI lab. Elon Musk's xAI was even later to the race, but its Grok chatbot is now one of the most technically impressive AI products around (egregious racism and anti-Semitism notwithstanding). And regardless of how far Meta has fallen behind in the AI race, the company has proved its ability to endure: Meta's stock reached an all-time high earlier this year, and it made more than $17 billion in profit from January through the end of March. Billions of people around the world use its social apps. The company's approach is also different from that of its rivals, which frequently describe generative AI in ideological, quasi-religious terms. Executives at OpenAI, Anthropic, and Google DeepMind are all prone to writing long blog posts or giving long interviews about the future they hope to usher in, and they harbor long-standing philosophical disagreements with one another. Zuckerberg, by comparison, does not appear interested in using AI to transform the world. In his most recent earnings call, he focused on five areas AI is influencing at Meta: advertising, social-media content, online commerce, the Meta AI assistant, and devices, notably smart glasses. The grandest future he described to investors was trapped in today's digital services and conventions: "We're all going to have an AI that we talk to throughout the day -- while we're browsing content on our phones, and eventually as we're going through our days with glasses -- and I think this will be one of the most important and valuable services that has ever been created." Zuckerberg also said that AI-based updates to content recommendations on Facebook, Instagram, and Threads have increased the amount of time that users spend on each platform. In this framework, superintelligence may just be a way to keep people hooked on Meta's legacy social-media apps and devices. Initially, it seemed that Meta would take a different path. When the company first entered the generative-AI race, a few months after the launch of ChatGPT, the firm bet big on "open source" AI software, making its Llama model free for nearly anyone to access, modify, and use. Meta touted this strategy as a way to turn its AI models into an industry standard that would enable widespread innovation and eventually improve Meta's AI offerings. Because open-source software is popular among developers, Zuckerberg claimed, this strategy would help attract top AI talent. Read: New Mark Zuckerberg dropped Whatever industry standards Zuckerberg was hoping to set, none have come to fruition. In January, the Chinese company DeepSeek released an AI model that was more capable than Llama despite having been developed with far fewer resources. Catching up to OpenAI may now require Meta to leave behind the company's original, bold, and legitimately distinguishing bet on "open" AI. According to the Times, Meta has internally discussed the possibility of stopping work on its most powerful open-source model ("Behemoth") in favor of a closed model akin to those from OpenAI, Anthropic, and Google. In his memo to employees, Zuckerberg said that Meta will continue developing Llama while also exploring "research on our next generation of models to get to the frontier in the next year or so." The Meta spokesperson pointed me to a 2024 interview in which Zuckerberg explicitly said that although the firm is generally "pro open source," he is not committed to releasing all future Meta models in this way. While Zuckerberg figures out the path forward, he will also have to contend with the basic reality that generative AI may alienate some of his users. The company rolled back an early experiment with AI characters after human users found that the bots could easily go off the rails (one such bot, a self-proclaimed "Black queer momma of 2" that talked about cooking fried chicken and celebrating Kwanzaa, tied itself in knots when a Washington Post columnist asked about its programming); the firm's stand-alone AI app released earlier this year also led many users to unwittingly share ostensibly private conversations to the entire platform. AI-generated media has overwhelmed Facebook and Instagram, turning these platforms into oceans of low-quality, meaningless content known as "AI slop." Still, with an estimated 3.4 billion daily users across its platforms, it may be impossible for Meta to fail. Zuckerberg might appear to be burning hundreds of millions of dollars on salaries and much more than that on new hardware, but it's all part of a playbook that has worked before. When Instagram and WhatsApp emerged as potential rivals, he bought them. When TikTok became dominant, Meta added a short-form-video feed to Instagram; when Elon Musk turned Twitter into a white-supremacist hub, Meta launched Threads as an alternative. Quality and innovation have not been the firm's central proposition for many, many years. Before the AI industry obsessed over scaling up its chatbots, scale was Meta's greatest and perhaps only strength: It dominated the market by spending anything to, well, dominate the market.

Meta CEO Mark Zuckerberg Just Assembled a "Super Intelligence Avengers" Team That Could Totally Change the Game in Artificial Intelligence (AI). Here's Why That Makes Meta a "Must-Own" AI Stock. | The Motley Fool

Investors may be generally tracking the artificial intelligence wars (AI), with most of the "Magnificent Seven" companies spending hand over fist in a race to be the first to crack AI -- and all the financial benefits that come with it. But over the last couple of weeks, Meta Platforms (META 0.37%) CEO Mark Zuckerberg has made truly massive moves, committing huge amounts of dollars to both talent and computing infrastructure that dwarf even the current super-expensive standard of today's AI leaders. The implications of the moves may have been comprehended by some, but may still be underestimated by the larger investment community. Over the past month or so, Zuckerberg has: On infrastructure investments, Zuckerberg also shed light on massive upcoming projects: One might wonder what spurred this spending binge from Zuckerberg, and whether it was an offensive or defensive move. The answer, perhaps not surprisingly, is likely both. Zuckerberg now says Meta is aiming for "super intelligence," which could be somewhat akin to what was formerly referred to as artificial general intelligence (AGI). The concept of super intelligence, and whether AI is capable of reaching such a thing, has been hotly debated. However, it appears that Zuckerberg now believes super intelligence is achievable, and may be reached within the next few years. In a recent interview with tech magazine The Information, Zuckerberg said: There is this big debate in the industry today. All right, is super intelligence going to be possible in three years, five years, seven years? But I don't think anyone knows the answer. I just think that we should bet and act as if it's going to be ready in the next two to three years. Zuckerberg also believes "super intelligence" may mean different things to Meta than it does to more enterprise-oriented Mag Seven companies. Whereas, say, Microsoft might use AI to automate many enterprise functions, leading to an increase in productivity, for Meta, Zuckerberg apparently has a vision of giving consumers "super intelligence" related to their everyday lives, the media they consume, and their social connections. Zuckerberg also made an interesting note in the interview that the high salaries are worth it, since the ultimate team will likely be small, between 50 and 70 people: I think that the physics of this is, you don't need a massive team to do this. You actually kind of want the smallest group of people who can fit the whole thing in their head. So there's just an absolute premium for the best and most talented people. This makes sense. The architecting of AI systems is very complex, and if a technician makes a wrong architectural choice along the way, that can affect the performance of the entire model. According to AI chip blog Semianalysis, Meta's recent large language model Llama 4 has been a disappointment, and the reasons were partly due to poor data labeling -- which the Scale AI acquisition should help with -- and a few poor architectural choices. Thus, it's perhaps no surprise that Zuckerberg feels investing in a smaller number of high-caliber engineers is the best path. The difference between a winning model and a disappointing model may come down to a few high-level decisions, so it makes sense that Zuckerberg would pay up for quality over quantity for Meta's new AI efforts. Another offensive aspect of this is that Meta has arguably more financial resources than its rivals, especially OpenAI, which is considered a start-up and losing tens of billions at the moment. Last year, Meta's "core" social media advertising business brought in a whopping $87.1 billion in operating income, somewhat offset by a $17.7 billion loss in its Reality Labs division. And that $87 billion is probably on track to reach close to $100 billion this year. Therefore, Meta has the ability to pay as much or more than its rivals, and by paying these types of astronomical salaries, it's raising the costs of employment for everybody -- OpenAI included. Zuckerberg continued: ... one of the benefits of reinforcement learning is it gives you a venue to, you know, potentially convert very large amounts of capital into a better and better service, and potentially a better service than other less well-funded or less bold competitors will be able to do so... I view that as a competitive advantage. If we can get this to work well, and that's why we are basically all in on this. We're building, you know, we're building multiple, multi-gigawatt data centers, and we can basically do this all funded from the cash flow of the company. While the "all-in" spending binge from Zuckerberg is exciting, investors should also be wary of a few things. First, it appears Meta's AI super intelligence dream team will be essentially starting from scratch. This is likely due to Meta's recent efforts on its Llama 4 LLM coming up short of expectations, or at least falling further behind its other competitors than Zuckerberg would like. So, it appears Meta's latest attempt at leading AI is a bit of a bust, raising questions about the need to put all its chips into the pot, so to speak, at this moment. It has also been reported that Zuckerberg wasn't able to successfully acquire all the companies and talent that he wanted. In addition to Scale AI, Zuckerberg reportedly also wanted to acquire Mira Murati's Thinking Machines and Ilya Sustkever's SSI, but was rebuffed in both cases. It was also reported Zuckerberg extended billion-dollar offers to some of OpenAI's leadership team, but was also rebuffed. So, while Meta now has perhaps the most formidable AI "dream team" around, it isn't a "full" dream team necessarily. Finally, Meta has a history of throwing money at certain far-off ventures, without immediate tangible outcomes. Look no further than the Reality Labs segment, which is basically Zuckerberg's gambit to create the "next computing platform" of virtual reality goggles or glasses. Meta even changed its name from Facebook to Meta Platforms in 2021 to show its commitment to the effort. However, in 2024, three years later, that segment lost $17.7 billion, up from a $16.1 billion loss in 2023. Finally, Zuckerberg didn't really spell out what he exactly meant by an everyday consumer "super intelligence." While both the Reality Labs division and the concept of consumer super-intelligence may one day come to fruition, it's not assured -- even with Zuckerberg assembling an AI "dream team." So while this past month's spending is exciting, look for investors to get impatient if Meta's spending goes up without a corresponding growth in revenue. If one of today's current tech leaders reaches "super intelligence" before the others, it has the potential to disrupt the balance of power among today's Magnificent Seven. That's why any young person or growth investor should have exposure to Meta and its rivals, in spite of their massive AI spending today. If and when one of these companies "cracks the code" before others, it's possible the Magnificent Seven could become the Magnificent Three, Two... or even One. With his moves over the past month, Zuckerberg is investing heavily to make sure Meta is one of the leading candidates to become that "one." Investors should keep their ears out for more information when Meta reports earnings at the end of the month on July 30.