Meta Open-Sources Powerful AI Model Amid Heavy Investment
Meta Platforms (NASDAQ: META) has open-sourced its Muse Glimmer AI model, a 30-billion-parameter system released on August 10. While the company plans to release weights for an even more powerful model later, it is leveraging AI internally rather than monetizing through subscriptions or APIs like OpenAI and Anthropic. Meta uses AI to enhance ad performance across Facebook and Instagram, with recent improvements leading to increased user engagement and conversions. The company's heavy investment in AI infrastructure has driven significant capital expenditures, reaching $31.1 billion in Q2 2024 alone. Meta now expects total capex of $130–$145 billion by 2026, with additional commitments extending into 2027 and beyond for data centers and cloud capacity. These investments may pressure future profit margins due to rising depreciation costs. Despite the high spending, Meta's valuation appears reasonable at around 16.8 times expected 2027 earnings per share of $33.9. The company benefits from its massive user base—over 3 billion daily active users—and even small improvements in engagement can lead to substantial revenue gains.
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