- Meta reports a 22% revenue increase to $39 billion in Q2, fuelled by AI-driven ad sales growth.
- Profits soar to nearly $13.5 billion, despite significant investment in AI and Reality Labs.
OUR TAKE
The surge in Meta’s revenue highlights the growing influence of AI in driving advertising sales. As Meta continues to invest heavily in AI, its ability to charge more for ads and reach a broader audience underscores the pivotal role of AI technology in modern business strategies.
— Zoey Zhu, BTW reporter
What happened
Sales of Instagram and Facebook adverts soared this spring, delivering a surge in profits for parent company Meta. The company said revenue rose to more than $39 billion in the three months to June, up 22% on the same period last year, as it charged more for adverts and the commercials reached more people. Profits jumped to nearly $13.5 billion despite huge levels of investment in its artificial intelligence projects.
The group also recently agreed to pay a $1.4 billion settlement to the US state of Texas over allegations it collected user facial data and other information without proper consent. On Wednesday, Meta founder and chief executive Mark Zuckerberg said that it had seen a “strong” quarter and suggested that its AI system is “on track to be the most used AI assistant in the world by the end of the year”.
Also read: Meta expects ad revenue growth in Q2, prioritises AI and cost efficiency
Also read: Meta releases powerful Llama 3.1 AI model for free, sparking debate
Why it’s important
Meta’s investment in AI and augmented reality highlights its commitment to leading technological innovation. Despite losses from Reality Labs, Meta’s strategic focus on AI is paying off, as evidenced by the revenue growth.
The company’s AI-driven ad sales on platforms like Instagram and Facebook demonstrate the potential of AI to enhance business performance. This focus is crucial as it positions Meta as a key player in the AI race among tech giants.
Additionally, the successful introduction of ads on Reels and the increasing ad prices suggest that Meta’s strategies are effectively combating competition from platforms like TikTok. This competitive edge is vital for maintaining and growing its user base and ad revenue.
