INVESTORS APPLAUD SHIFT TOWARD AI, COST DISCIPLINE AND CORE PRODUCT STRENGTH
Meta will cut its Metaverse budget by as much as 30%, a move that boosted its stock as investors respond positively to the shift toward efficiency and AI-driven priorities.
Meta announced plans to reduce its Metaverse budget by up to 30%, signaling a significant reallocation of resources away from long-term virtual reality investments and toward nearer-term initiatives, including artificial intelligence and core platform optimization. The decision marks one of the largest strategic pivots since Meta rebranded from Facebook in 2021.
The cut comes after years of heavy spending on VR hardware, digital worlds and immersive technologies — investments that have yet to achieve widespread consumer adoption. By scaling back its Metaverse ambitions, Meta aims to streamline operations, improve margins and redirect capital to projects with more immediate commercial payoff.
Investors reacted swiftly, sending Meta’s stock higher in early trading. Market analysts say the spending cut addresses long-standing concerns about Metaverse overextension and demonstrates stronger fiscal discipline at a time when tech giants face rising pressure to show profitability.
Meta has emphasized that Metaverse development will continue, but at a more “pragmatic” and “cost-efficient” pace. Company insiders say AI-powered features across Facebook, Instagram and WhatsApp are now top priorities, along with infrastructure improvements to support creator tools and advertising performance.
Critics argue the budget reduction confirms what many have predicted — that Meta’s vision for a fully immersive digital world remains far from mainstream viability. Supporters counter that the shift will free Meta to pursue AI leadership, where demand and competition are rapidly accelerating.
The company is expected to provide more details on revised spending plans during its next quarterly earnings call.
