Meta Platforms Inc., the parent company of Facebook and Instagram, is set to experience a significant increase in ad sales due to its adoption of AI technology.
During a recent conference call, CEO Mark Zuckerberg revealed that AI is playing a pivotal role in enhancing platform traffic and driving higher revenue from ad sales. This announcement had an immediate impact, with after-hours trading witnessing a 12% surge, leading to a more than $50 billion increase in Meta’s market value.
Meta has historically been cautious in embracing AI-friendly hardware and software systems, resulting in a delay in integrating AI technology into its core business operations. The company had to undertake expensive overhauls to strengthen its core business, including a substantial project aimed at enhancing its AI capabilities.
As Zuckerberg emphasized, Meta is now on track to build and deploy its AI infrastructure at scale, signifying a shift from its earlier position.
The company reported that AI-driven recommendations have increased the time users spend on Instagram by 24% during the quarter from January to March, making a substantial impact on Meta’s business. These AI efforts have also been beneficial on the advertiser side, enabling Meta to implement more advanced algorithms for precise ad targeting.
In addition to adopting AI technology, Meta has initiated a rigorous cost-cutting strategy, which includes eliminating 21,000 jobs and streamlining its middle-management structure. Zuckerberg’s goal of making 2023 the year of efficiency aligns with these ongoing efforts.