Story perspectives

Meta Shifts from Metaverse to AI Amid Massive Losses

12/6/2025

Summary

Story summary

Meta Platforms, Inc. is shifting its focus from the metaverse to artificial intelligence after Reality Labs has lost over $70 billion since 2021.
Meta plans to cut the Reality Labs budget by up to 30 percent.
Layoffs could begin as early as January 2026.
Investors express frustration as Meta's advertising business accounts for 99 percent of revenue and the company plans to invest about $72 billion in AI this year.

History

Historical Context

In 2021, Meta Platforms, Inc. rebranded from Facebook, Inc. to emphasize its commitment to the metaverse, investing over $70 billion in virtual reality technologies. Despite this shift, advertising revenue, which accounted for nearly 98% of its income, remained the company's primary focus. This pivot towards artificial intelligence mirrors broader trends in the tech industry, with competitors like Google and Microsoft also prioritizing AI advancements.

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Story summary

Meta Platforms, Inc. is shifting its focus from the metaverse to artificial intelligence after Reality Labs has lost over $70 billion since 2021.
Meta plans to cut the Reality Labs budget by up to 30 percent.
Layoffs could begin as early as January 2026.
Investors express frustration as Meta's advertising business accounts for 99 percent of revenue and the company plans to invest about $72 billion in AI this year.

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