[chowchowchow]

Surprised at this post. Arguing against that meta is dying is a straw man. It’s not a myth that the growth thesis from here is weak and there’s a massive headwind on cash flow from all the money being thrown at the metaverse projects with no foreseeable revenue upside.

[camdat]

According to the article, this is a myth.

> Myth 5: Meta’s Spending is a Waste

Any rebuttal to the arguments he makes?

[chowchowchow]

He doesn’t defend the metaverse spending. He argues it’s not that much comparably but a) that’s kinda subjective. Is 10 out of 40 billion a lot? and b) that’s no defense really.

[gumby]

They might have overbet on VR, but they remember acutely that they "lost mobile" which was basically an existential threat for them. Through major* effort they clawed their way back to the top on mobile. I guess Z thinks that VR is the next phase and that they aren't going to make the same mistake again. He's certainly been interested since buying Oculus.

Even if they don't sell a lot of headsets, they will probably have more experience than anyone else on what works and doesn't, and how that relates to the experiences they need to create. Of course this depends on VR actually mattering, which I doubt. Perhaps some of that will apply to AR, though when that goes mainstream is another big question.

* Normally the adjective "heroic" would be appropriate to describe the level of effort, but somehow I can't use that word when talking about a company, much less one like FB.

[camdat]

>The problem with this line of reasoning is that Meta’s capital expenditures are directly focused on both of the two main reasons for alarm: TikTok and ATT. That is because the answer to both challenges is more AI, and building up AI capacity requires a lot of capital investment.

>In the long run, though, this investment should pay off. First, there are the benefits to better targeting and better recommendations I just described, which should restart revenue growth. Second, once these AI data centers are built out the cost to maintain and upgrade them should be significantly less than the initial cost of building them the first time. Third, this massive investment is one no other company can make, except for Google (and, not coincidentally, Google’s capital expenditures are set to rise as well).

[chowchowchow]

And? Neither of those quotes mentions metaverse spending.

[camdat]

RL spending (that 10B you're mentioning) includes this capital expenditure. Obviously the percentage of that 10B going to deployment is unknown, but given that it's the most expensive part (according to the author), I assume it's the majority.