Meta has impressed investors with an AI boost to its internal operations
Mark Zuckerberg may have a history of copying of others’ ideas, but when it comes to navigating the GenAI hype cycle, he’s the one forging a smarter path. In the year to date, Meta Platforms’s shares have significantly outperformed its tech giant peers, rising 54% while the likes of Alphabet’s Google and Microsoft have gone up 18.5% and 12% respectively. Why? Investors have become more sceptical in recent months about how quickly new AI models will economically benefit the customers of cloud giants, and their enthusiasm for Microsoft, Google and Amazon.com has waned.
Meta is different. Instead of merely pitching artificial intelligence (AI) as an economic boon, it has demonstrated how AI has made Meta’s own ad systems more effective and ultimately profitable. Zuckerberg’s clarity on those details in earnings calls has won him praise from analysts, and likely contributed to the stock bump.
The lesson he’s offering his peers on AI is an oldie but a goodie: Show, don’t tell. Meta, of course, is in a different position from Amazon, Microsoft and Google, as it doesn’t sell AI tools as part of a dominant cloud service like they do. But that doesn’t mean the so-called hyperscalers can’t learn from his approach.
One big factor weighing on AI sentiment concerns utility. Cutting-edge AI models from OpenAI, Anthropic and Google can conjure human-like prose, computer code and photo-realistic images, but figuring out how to plug that into business processes is taking longer than many in the market would like. Anthropic, a leading maker of generative AI models, told me that the three most popular use cases for its technology were chatbots, text summarization and coding.
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