After Reportedly Burning Through $77 Billion, Mark Zuckerberg Finally Shifts Meta's Focus
Meta's Mark Zuckerberg made a big gamble, and it reportedly cost his company $77 billion in the last five years. Now he's switching gears in a big way.
It's called the metaverse, and Zuckerberg was so invested in the concept that he renamed Facebook after it, rebranding the company Meta. That change occurred back in 2021, and, now, he appears to be making a big change by scaling back the company's approach and shifting resources elsewhere.
With AI taking the tech world by storm, the metaverse never took off the way Zuckerberg intended. Meta's stock got a boost from the announcement that he's shifting course. According to Bloomberg, Zuckerberg was initially so sold on the metaverse concept that he "once framed" it "as the future of the company."
What Is the Metaverse?
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What is the metaverse, though? It's more than virtual reality. It's a concept that envisions a series of interconnected digital worlds, including virtual reality, but also social media and other digital environments.
According to the Wall Street Journal, the changes are "part of Meta’s annual budget planning for 2026," and the company's spending is expected to move from the metaverse to "artificial-intelligence wearables." The latter is a concept that major tech companies like Apple have been investing in, WSJ reported. The metaverse is part of the Meta Reality Labs division.
The metaverse has been described as "a vast network of interconnected digital spaces." Zuckerberg had pitched this concept as Meta's future. According to Forbes, "the metaverse tends to be based on open platforms that allow users to develop and share content and applications."
Forbes described the metaverse as "a network of interconnected virtual worlds. Each virtual world in the metaverse can be designed and managed independently of the others."
What Change Is Mark Zuckerberg Making?
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Bloomberg broke the news that Zuckerberg appears to be shifting Meta's focus to AI and away from the metaverse. This is a big change because of how much the Facebook founder had emphasized the concept.
According to Bloomberg, Meta may be cutting as much as 30% of the metaverse segment of the company, called Reality Labs. This comes as Facebook is trying to cut back 10% across the board.
Bloomberg reported that Zuckerberg is planning "deep cuts" to the metaverse. He "is expected to meaningfully cut resources for building the so-called metaverse," the site reported.
According to Trading View, the change "reflects Meta's continued shift in focus from immersive virtual reality projects toward its rapidly growing AI and advertising initiatives." Investors felt the change was positive because it means Facebook will be investing more in AI.
Bloomberg's Caroline Hyde explained that Meta will likely make layoffs. Zuckerberg "gathered his top executives in his house in Hawaii" to discuss where resources should be shifted, she said. She added that the investment in AI needs to be offset elsewhere at Meta, which is what ignited the focus on metaverse reductions. In addition, according to Hyde, some experts believe the metaverse hardware was too expensive, which is one reason that it never fully took off.