Meta stock dips after AI product is delayed

Key Points

• Meta shares fell 0.6% on Friday after reports emerged that its AI product rollout had been postponed.
• The company delayed its flagship AI model code-named “Behemoth,” pushing the original April launch back to fall or later due to performance optimization issues.
• Despite the setback, Meta’s core social media business remains strong, and some analysts view the delay as a cautious move to protect user trust and system performance.
• Most observers believe the postponement will have a limited long-term impact given Meta’s leading market position and continued commitment to AI development.

Following reports of a delay in the rollout of its artificial intelligence (AI) product, Meta Platforms NASDAQ: META, which runs some of the most well-known social media platforms globally, saw a decline in its stock price on Friday. While the larger S&P 500 index increased by a comparable amount, Meta’s shares ended the day down 0.6%.

Meta stock dips after product delay

Late Thursday, the Wall Street Journal revealed that Meta had once again delayed the release of its flagship AI model, code-named “Behemoth.” Sources with knowledge of the matter claim that company engineers are having difficulty optimizing the model’s performance. According to the report, Behemoth’s original launch date was April, which also happened to be Meta’s first developer conference with an AI focus. The revised schedule now indicates a fall release, or possibly later, after an initial postponement to June.

Even though Meta has made a strong public commitment to AI, the delay reflects ongoing challenges within the company’s development efforts. CEO Mark Zuckerberg has often highlighted AI’s transformative potential, arguing that it could transform user interaction by providing AI-driven mental health support or even virtual friends.

Meta has not responded to the Journal’s report with an official statement, but the company’s goals for AI are still very clear. It believes that technology will play a significant role in its future development, especially in improving the user experience on its social media platforms, which include Facebook, Instagram, and WhatsApp.

Even so, some market watchers might consider the delay to be a calculated move rather than a serious setback. A cautious approach is more prudent because launching cutting-edge AI tools too soon could jeopardize user trust and performance. With its well-established platforms holding onto their leading market positions and bringing in sizable sums of money, Meta’s core business is still doing quite well.

Although there was a short-term negative reaction from investors, this delay might not have a significant long-term effect. Even if it takes longer, the creation of sophisticated AI tools is not likely to derail Meta’s overall course, as the company is still a major player in the tech sector.

Featured Image Credit: Julio Lopez; Pexels: Thank You!

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