Generative AI helped Meta get its mojo back

Meta CEO Mark Zuckerberg walks to lunch following a session at the Allen & Company Sun Valley Conference on July 08, 2021
(Image credit: Getty Images)

Big tech earnings calls have been buoyed by generative AI in recent weeks as major hyperscalers including Microsoft and Google all report record growth, but it’s Meta that is emerging as a big winner in the industry. 

Microsoft, arguably the industry leader in generative AI at present, has performed remarkably over the last year as its sharpened focus on the technology has paid dividends. The tech giant recently overtook Apple as the world’s most valuable company, and generative AI was specifically highlighted as a key contributing factor to the stock price surge at the company.

All told, the industry has been utterly saturated with product announcements from the big three hyperscalers in recent months, all of whom have been battling things out in the open.

Meta, meanwhile, appears to have been content allowing Microsoft, Google, and AWS to share the limelight and the never-ending torrent of headlines. The firm went about its business in a very shrewd manner across 2023, and has focused intensely on positioning itself as an open source AI champion.

The launch of its Llama 2 model in July 2023 was met with a resounding applause from tech industry stakeholders, and framed the company as a key proponent of democratization in the generative AI space.

Meta has focused heavily on the Llama 2 model since then, rolling out increasingly powerful versions that place the LLM on-par with OpenAI’s GPT-3 model.

Similarly, Code Llama, Meta’s answer to GitHub Copilot, was also released as an open source model and saw users flock to the platform.

Meta is all in on generative AI

But while Meta may have developed an image as an open source advocate in the emerging era of generative AI, money talks - and recent earnings calls show that it’s making a triumphant comeback.

The company added a staggering $196 billion in stock market value on Friday in a surge that marked the largest single-day gain by any firm in Wall Street History.

This success now places Meta’s stock market value at more than $1.22 trillion, according to Friday figures.

While much of this was due to a spike in ad sales and a rebound in user growth, as well as a tightening of purse strings during Mark Zuckerberg’s ‘year of efficiency’, this does mark a return to prosperity for Meta, according to Mike Proulx, VP research director at Forrester.

“We predicted in 2024 big media would get its mojo back,” he said. “Meta’s 2023 results signal a promising year ahead as brands double down on advertising once again.”


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Crucially, Proulx said, Meta’s focus on generative AI has been a key differentiator for the tech giant in recent months, and has enabled it to redirect focus away from its metaverse failures.

Eventually, he said, Meta will become an AI company “above all else”.

“It’s no surprise Mark Zuckerberg led off with AI as a major part of Meta’s long-term vision but the scope of which the company is leaning in is ambitious,” he said. “It reaffirms that Meta is (or will become) an AI company above all else.”

“While the metaverse was mentioned, it continues to take a back seat to AI, as it should.”

Zuckerberg’s great metaverse shift was hailed as a major turning point for the company in late 2021. But reality didn’t quite meet expectations as enterprise demand and consumer interest failed to take off. The merging of digital and physical worlds just wasn’t everyone’s cup of tea.

The company recorded staggering losses in its metaverse push, with its Reality Labs division losing more than $42 billion since the end of 2020 – and the latest quarter was the biggest loss yet.

In the year ahead, it also expects to record further losses, which Proulx said raises questions about “how long the company digs its heels into an increasingly unsure bet”.

With generative AI, however, the company appears to have its “safe bet”. Investor confidence on artificial intelligence has been growing rapidly in recent months, with optimism on this front prompting a 24% rally in the S&P 500.

Major tech industry players, including Nvidia and Microsoft have reaped the rewards of this bullish investor focus, and Meta looks intent on capitalizing further.

Ross Kelly
News and Analysis Editor

Ross Kelly is ITPro's News & Analysis Editor, responsible for leading the brand's news output and in-depth reporting on the latest stories from across the business technology landscape. Ross was previously a Staff Writer, during which time he developed a keen interest in cyber security, business leadership, and emerging technologies.

He graduated from Edinburgh Napier University in 2016 with a BA (Hons) in Journalism, and joined ITPro in 2022 after four years working in technology conference research.

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