What Are META's AI Ambitions?
META’s most recent LLM was a failure, thus the recent spending spree on Phd AI researchers in an effort to catch OpenAI and Google.
META revenues and net income have approximately doubled since 2020, yet META shares are up more than 200% over the period (up more than 700% since the 2022 low, while META’s revenue and net income growth are 40% and 170% since 2022). Why the outsized stock price gains?
META won’t win the frontier LLM game and ought to stick to smaller, inexpensive models that have niche expertise (Ad expertise across each domain). We’ve yet to see someone build a model that dominates a particular domain. If META seeks to be first to superintelligence, perhaps it ought to pursue a domain-focused approach.
I am hopeful that at some point investors will reward the AI winners (NVDA, GOOGL) and hold the AI losers (MSFT, META) to account.
