Why shareholders might be alarmed by Meta’s new AI strategy

Meta >> out this morning with the news of they call it Muse Glimmer. It's a new AI model, light enough to run at home on your own computer. You download it. You can tweak it however you want. Kind of appealing to the the customer, the you and I. We also saw Mark Zuckerberg coming out this morning with this. I think it was 6,500 word essay arguing the personal super intelligence for everybody. >> 6,500 words. Come on, man. Like are you what what are we doing here? You know, like >> could have been 300. >> I mean, >> could have been nothing. Could have been nothing. >> Did Glimmer write it? I mean, I I have to ask anyway. Sorry. Go ahead. >> No, I'm I'm going to I'm going to get some angry calls from Metaccoms about this, no doubt. But but generally, I [laughter] Mark Zuckerberg is maybe one of the greatest businessmen in the world, one of the greatest CEOs in the world, has created a huge amount of shareholder value, which is all I care about. Um, and so this idea, right, I I did read the essay. This idea that suddenly meta is moving altruistically. This isn't this isn't a new one. We had this with open internet back in the day. We've had various sorts of rebrands and PR pushes. >> Um, I I don't know. There's there's it's very hard from with my investing hat on. I'm I'm very pleased that Meta is trying to compete aggressively here. And I think that'll be a real boon for their shares if they can figure it out and keep the talent. That's an open question. >> But it also unfortunately precages another question which Demis obviously Mark Zuckerberg courted him very aggressively. There's this one anecdote he has uh about Mark Zuckerberg and I have not confirmed this. I don't know if it's true but no reason to lie here, right? Um where essentially he sat down to dinner with Mark and Mark said, "Look, I'm so excited about AI. I think this and Demos he's saying all the right things." And then they test him out. He says, "Well, what do you think about the metaverse?" And Mark Zuckerber responded with the same amount of excitement for for the metaverse, for virtual reality, for gadgets, for devices. And Deus goes, "Okay, you just >> you just get excited about everything. You don't actually see this as the transformative transformative tech that I do." And I think it's always been a question. Why is Meta playing here? Why are we spending tens of billions of dollars poaching these people? It's why >> Well, this has been the question for Meta going back how long? The metaverse, the glasses, the goggles. >> Again, I've said this here multiple times, and I'm going to get some angry emails, too. it always feels like they're just a bit behind the ball. So, >> so I mean two things I want to say quote from the from the essay. Meta's mission since our founding has been focused on putting pe power in people's hands. >> Sure it has. >> Yeah. Exactly. Right. But then on the flip side, I think it kind of makes sense to doing what to to do what they're doing right now with this with the the the open claw moment for them, right? They're basically saying putting into your hands, right? But what that really means is down the line is hey we're going to have our own deepseat type thing where you don't need to like pay the front of your mouth so much money >> and that is why they want because the US government there there is a stunningly shallow bench of of open-source uh US or Canadian or European models that actually work and are good. >> That's right. And so Meta, whether this is altruistic or a bit of political calculus or a bit of economic calculus, >> this is a great move for them if it works and if there is adoption because the government will look at that and smile and if anything make them a preferred vendor, >> right? And I was talking to our Dan Howie about this and it's like it's not that they're be running these these models on the their own systems going be on Meta's Meta Cloud, right? And Meta's data centers and they get that money. Oh, >> very low licensing fee for the software. We're going to charge you a lot for the data. >> And don't forget, they're also going to be selling that excess compute back, making more money there. You see that Mark Zuckerberg feels like he's where can I extend this just a little bit further? Where can I find? And look, if you've committed to spending $2 trillion, makes sense to broaden out the customer base. >> It does. Although it should it should alarm shareholders I think a little bit that a company company's primary obligation is to be a good steward of capital misassessed their own demand which they should know better than anyone >> for data centers and comput and Mark can say whatever he wants of this always being the plan I'm sure he will I'm sure he has um the fact that you are overbuilding or overcommitted to a degree that you need to start building out a new business line >> um is is disturbing and a little scary and it also says something deeper I think which is that if Meta could they would get out of it. >> That's right. >> I think it's also too little too late what you were saying. I think that's a big point.