Meta CEO Mark Zuckerberg dubbed 2023 the “year of efficiency” as the social media giant’s Reality Labs division, which has been losing billions over the last few years, crossed the $1 billion revenue mark for the first time during the fourth quarter of 2023.
Zuckerberg attributed the revenue milestone to Quest 2 and particularly Quest 3, the virtual reality (VR) headsets developed by Reality Labs, enjoying a strong holiday season.
“Not only did we achieve our efficiency goals [last year], but we returned to strong revenue growth, saw strong engagement across our apps and shipped a number of exciting new products like Threads … and of course, established a world-class AI effort that’s going to be the foundation for many of our future products,” Zuckerberg said on Thursday (Feb. 1) during his Menlo Park, California-based company’s full year 2023 earnings call.
The tech firm also expressed optimism that investments in artificial intelligence (AI) and the metaverse, the two major pillars of its long-term vision, will eventually pay off, and shared its intention to continue pursuing such strategic investments this year.
“I still expect this next generation of AR/VR and MR computing platforms to deliver the realistic sense presence that will be the foundation for the future of social experiences, and almost every other category of experiences as well,” Zuckerberg said.
On the downside, however, Meta said it anticipates operating losses for the Reality Labs to “increase meaningfully year over year,” attributing it to ongoing product development in AR/VR and investments aimed at expanding the ecosystem.
He added that having a leaner business model has contributed to accelerating the company’s goal of building the most popular and most advanced AI products and services for the 3 billion-plus individuals worldwide who use at least one of its messaging apps each day.
“If we succeed, everyone who uses our services will have a world-class AI assistant to help get things done. Every creator will have an AI that their community can engage with. Every business will have an AI that their customers can interact with to buy goods and get support, and every developer will have a state-of-the-art open-source model to build with,” Zuckerberg added.
Other key financial figures highlighted included revenue of $40.11 billion and $134.9 billion for Q4 and full year 2023, respectively, reflecting year-over-year increases of 25% and 16%. Additionally, the delivery of ad impressions across all its apps saw significant growth, with a 21% increase in Q4 and a 28% surge for the full year 2023, as compared to the previous year.
Building full general intelligence is another crucial goal to deliver the next generation of services, Meta said, pointing to general intelligence research it has been conducting for over a decade.
“Previously, I thought that because many of the tools were social-, commerce- or maybe media-oriented, that it might be possible to deliver these products by solving only a subset of AI’s challenges,” Zuckerberg acknowledged.
However, with a new shift in perspective, he emphasized the critical need for models to encompass a wider array of cognitive abilities, such as reasoning, planning, coding and memory. This, he highlighted, is key to providing “the best versions of the services that we envision.”
The company further outlined its long-term strategy, emphasizing a commitment to world-class computing infrastructure and open-source software infrastructure. This will be part of investments to develop advanced clusters and design innovative data centers tailored to its specific workloads.