Mark Zuckerberg is Making Big Cuts to the Metaverse After $77 Billion Loss
After renaming his company to reflect its shift toward the metaverse in 2021 when he declared it as the next frontier, Mark Zuckerberg is now set to make big cuts to Meta’s Reality Labs. The Wall Street Journal estimates that Zuckerberg’s foray into the immersive online world has lost Meta an eye-watering $77 billion and, as Meta plans its 2026 budget, the company is planning to divert funds from the metaverse to artificial intelligence. News that Zuckerberg is planning to change course led to at least a 3% jump in Meta’s shares on Thursday. Investors have been critical of the metaverse for years. One analyst from market research company Forrester calls the Reality Labs division a “leaky bucket” and predicted earlier this year that it would close metaverse projects. “Within our overall Reality Labs portfolio, we are shifting some of our investment from metaverse toward AI glasses and wearables given the momentum there,” a Meta spokeswoman says. “We aren’t planning any broader changes than that.” Sources tell Bloomberg that the metaverse hasn’t taken off the way Zuckerberg expected it to and he is now looking at cutting Meta’s virtual reality group by as much as 30%. This will affect Horizon Worlds, a virtual platform where players can chat with other players while represented as avatars. Meta Quest VR headset.
Ultimately, immersive headsets have not replaced devices such as smartphones and computers — and Zuckerberg has talked less and less about the metaverse since 2021. His vision of people working and playing while immersed in a VR headset just hasn’t chimed with the public. Users of the Meta Quest and Apple Vision Pro report that the goggles feel heavy and get uncomfortable after prolonged use. In the intervening four years the big story in technology has been the rise of generative AI, an industry Zuck now firmly has his sights set on in the form of Llama, Meta AI, and a next-gen AI-powered version of the Meta Ray-Bans that have a built-in augmented reality display. The Meta Ray-Bans have been the one major success from the Reality Labs division, which as the Meta spokesperson says, will continue to get investment. Image credits: Mark Zuckerberg / Horizon Worlds
