Meta CEO Mark Zuckerberg says Muse and Reality Labs are highly unprofitable — for now
Meta CEO Mark Zuckerberg announced that the company's AI assistant, Muse, is currently unprofitable due to high compute costs, though he expects efficiency gains to change this soon. Meanwhile, the Reality Labs division is projected to reduce its annual losses to $15 billion by 2027.
Why it matters
Meta's massive investment in AI and hardware is a central point of contention for investors, making the path to profitability for these divisions critical for the company's future valuation.
Meta CEO Mark Zuckerberg. Finn Gomez/Getty Images Meta's AI agent, Muse, is unprofitable due to "very high compute costs," CEO Mark Zuckerberg says. Meanwhile, Meta expects Reality Labs, its AI glasses division, to lose $15 billion next year. The social media giant has a plan to fix that. Meta says some of its biggest cash incinerators could finally start turning profits. The social media giant, which generated over 97% of its quarterly revenue from ads, has faced persistent questions from investors about the lack of profitability in its AI and hardware initiatives. Meta CEO Mark Zuckerberg addressed those concerns head-on during its third-quarter earnings call on Wednesday. Zuckerberg said that Muse, the AI assistant it launched last month, is unprofitable since it's "very compute intensive to run." Meta expects to start turning that around next year by massively improving Muse's efficiency.
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