‘Painted into a corner’: can generative AI save Meta from the metaverse?

theguardian.com:

Meta is not pivoting away from its signature product, the metaverse. Or at least that’s what the Meta chief executive, Mark Zuckerberg, is arguing.

Despite reports that sales teams at Meta have spent less time pitching the metaverse to advertisers, Zuckerberg claimed on the tech firm’s latest quarterly earnings call that it’s business as usual over at the company formerly known as Facebook. “A narrative has developed that we’re somehow moving away from focusing on the metaverse vision, so I just want to say upfront that that’s not accurate,” the CEO said.

But neither is the virtual reality world the only product Meta has bet its future on, Zuckerberg argued: “We’ve been focusing on both AI and the metaverse for years now, and we will continue to focus on both.”

It’s a tough time for Meta. The company is facing growing worries from investors that the ambitious metaverse project is draining too many resources without profit to show. The company is devoting more than $10bn a year to develop the interactive world. But its Reality Labs unit reported a $3.99bn operating loss in first-quarter results posted this month, after losing $13.72bn last calendar year. Its flagship virtual platform, Horizon Worlds, reportedly has fewer than 200,000 active users.

Moving away entirely from the metaverse after its flashy launch in October 2021 is a pivot the company cannot afford. Meta has painted itself into a corner with the aggressive rebrand, said Paul Barrett, deputy director of the NYU Stern Center for Business and Human Rights.

“Zuckerberg made an unusual commitment both in terms of the amount of money that was devoted to 3D-related pursuits and the very symbolic gesture of changing the company name,” he said. “When you change your