Spending $15B to hire a 28 year old to build you some AI is certainly a move. You can call Zuck many things, but "afraid to take risks" isn't one of them.
He was spending $5b a year on whatever the metaverse was supposed to be and even renamed the company. Does anyone here use it? I think he weathers what I consider failure well. Or, conversely he can take big risks without too much blowback.
He would still be unbelievably rich even if Meta went bankrupt. He is in the unique position to have majority control of one of the world's largest tech companies and can pretty much use it to do what ever he wants. I doubt he cares much about Facebook past it's ability to generate money at this point.
What is the big risk here? He has the cash to burn and he has full control of his position. Nothing will happen to him if he wastes a few Billions. He is not some poor single mom who has to decide between fixing her car and paying for kid’s Christmas presents
Cash is the least concern. I listened to a podcast about the history of Microsoft and there were times where Gates said "at least it was only money" or something to that effect.
Microsoft floundered an entire decade on mobile and Windows Vista when they were going to lose out on Google that was literally paying OEMs to use their software and Apple, who had a vertical stack and made money off hardware. Huge setback in terms of focus that took them a long time to recover from.
The main constraint is focus of talent to work on one thing. This is a huge move in terms of coordinated effort into this space that may or may not pay off.
I've been in the tech industry a quarter century, I've never heard this "pretty common saying" before, and most importantly I don't think it makes any sense. If anything, tech excels at disruption, where smaller competitors and new ideas are able to solve problems where "just throwing money at it" has failed.
I challenge you to name a tech unicorn who's biggest advantage wasn't the ability to hemorrhage money over a period of time that would've killed any normal business stone dead.
The risk here is that you've now put a person with no track record of success outside of being good at sales in charge of your AI efforts. You're betting that he's going to be the one to attract talent.
The right leadership might be able to get talent to work for a discount. The wrong one would lead to talent not coming at all.
If Meta is known for anything besides user privacy violations it's for taking risks that often pay off. They were laughed at for overpaying for Instagram and Whatsapp, yet both were instrumental to their current success. Their continued bet on VR is still highly criticized, yet they were the first Big Tech company in the space, they're the current market leaders, and I'm sure it will have huge ROI in the near future. So is this bet on Wang, as ludicrous as it may seem now.
> laughed at for overpaying for Instagram and Whatsapp
That's not how it went down. They were laughed at for screwing up so badly that these apps were drinking their milkshake, and then they panicked and paid way more than any fundamental analysis would price these apps at, because they weren't actually buying an app, they were paying a ransom on their monopoly.
> Their continued bet on VR is still highly criticized
Because Zuckerberg thinks people are going to go around wearing his face hugger.
> and I'm sure it will have huge ROI in the near future
The "VR play" is predicated upon VR somehow taking even more time away from its users than cellphones do. The only way it works is if people put it on when they wake up and take it off when they go to bed. Heck, maybe leave it on in some kind of REM-mode so zuck can put ads in our dreams.
Meta "succeeds" as you demonstrated, when they wait for someone else to outflank them, mostly by not being Meta because Meta is creepy and nobody likes it, and then they fire a money bomb at at. The way for VR could have succeeded is if Occulus stayed independent and focused on gaming where it shines for another decade, and then as people start to feel like it could be a building block for something more, snatch it out from under them. Instead Zuck bought it too early and smothered it with his empire of ick.
I've been all for it, look at my comment elsewhere in this thread. For me this is a huge mistake of a transaction that's neither accretive financially nor talent-wise.
This isn't the Instagram or Whatsapp transaction. Scale's been exclusively in the data labeling space.
Let's put this into perspective. OpenAI bought Jony Ive for about $5bln. Meta spent 3x that on Wang.
I'm not familiar with Scale, but data labeling can make or break a ML model. So if Scale is good at this, the $14B investment will pay itself off in no time.
There was quite loud reporting earlier this (or last?) year that Scale's data was so poor that it led to a great deal of setbacks, scrambling, and friction between the two companies. That reporting was at the top of my mind when I read this news, so I was even more baffled.
Imagine being the people at Meta who've had to deal with Scale now seeing Mark buy Scale's CEO for $14bln.
What is convincing you that VR will have huge ROI in the near future? We are over 10 years in to the modern VR era and despite even Meta’s strong device sales it’s still very niche. Apple is trying their hardest and even they had to correct their sales expectations.
The thing is, I can imagine some futuristic version of AI that transforms humanity. But with VR, even in my wildest dreams with all the problems solved, it’s still just second best to smartphones and computers.
Imagine the perfect headset. Tiny, battery lasts forever, photo-realistic. I would still rather browse the Internet on my phone. I’d rather do my work on my laptop. I’d rather watch movies on my TV. What is the VR adding? Nothing but extra hoops to just through to get things done.
The only usecase that makes any sense is gaming. But only some games. It’s just too niche.
> What is the VR adding? Nothing but extra hoops to just through to get things done.
It gives you maximum immersion into a digital world. Rather than view it through a rectangular 2D window, it can encompass 360 degrees of your vision in full 3D. If you don't see how this would be appealing for consuming content, work, entertainment, etc., then I can't convince you otherwise.
VR adoption has always been held back by what is technically possible and how expensive it is. Nobody other than tech enthusiasts wants to wear a bulky headset for extended periods of time. Once we're able to produce that perfect headset that you mention, so that it's portable and comfortable like a pair of sunglasses, at an affordable price, the floodgates will open, and demand will skyrocket.
The same already happened with mobile phones, several times. The cellular phone was invented in the early 1980s. It was heavy, bulky, and expensive, and only business people and enthusiasts used them. It wasn't until the mid-to-late 90s that they got cheap and comfortable for the general public. Then the modern smartphone had several precursors that were also clunky and expensive. It wasn't until the iPhone and Android devices that the technology became useful and accessible to everyone. There's no reason to think that the current iteration is the ultimate design of a personal computer.
The same story is repeated for any new technology. VR itself has seen multiple resurgences in the last few decades. We're only now reaching a state where the vision is technically possible. There are several products on the market that come close. VR headsets are getting smaller, cheaper, and more comfortable, and AR glasses are getting cheaper and more powerful. I reckon we're a few generations away from someone launching a truly groundbreaking product. Thinking that all this momentum is just a risky bet on a niche platform would be a mistake.
> If you don't see how this would be appealing for consuming content, work, entertainment, etc., then I can't convince you otherwise.
I don't, legitimately I don't.
Okay, maximum immersion. And how does that help?
Like even just on the surface having a 360 degree view doesn't do anything. Because my eyes are on the front of my head, so I'm going to be looking forward. Stuff behind me doesn't matter much.
Same thing with 3D. Okay... but paper is two-dimensional, you know what I mean? Something being 3D by itself doesn't mean it's better or contains more information or is easier to use. I'd rather read and write on a two-dimensional surface. Reading and writing is the core of a lot of stuff, so there's goes that.
The test for me really is imagining some usecase and then imagining how it would be on super advanced VR. If you try that, you'll find that 90% of usecases just fail compared to already existing technology. Like imagine some perfect VR tech 5,000 years from now. Okay, now a usecase: programming. I would rather program with a keyboard and mouse and a monitor. I don't want to talk to VR. I don't want a dumbass virtual keyboard, that's worse. The 3D stuff makes no difference because I'm reading text. So even with alien technology, my current computer right now would beat it.
With the phones you mention, when we envision some futuristic technology we can see how the phones would be useful. Same thing with TVs - I mean, people were envisioning wall-wide flat screens in the 60s. But when you do that with VR, the product still isn't very good. That's the difference, in my eyes.
What you're saying makes sense, and I do agree with some of it. But you're not seeing the experiences that a fully immersive digital world can deliver once the technology and UX improves.
Yes, we read and write on 2D surfaces, but a 3D environment allows you to have an infinite number of them. You could be writing on one, with a video playing in the background, while keeping an eye on a stock ticker, all inside a virtual beach, outer space, or whatever you want. You could be having a conversation with someone who looks and feels like they're physically in front of you. Have you seen the new visionOS avatars? They're incredibly realistic. Talking to a 2D video from a crappy webcam feels awfully primitive in comparison.
There are an infinite number of these experiences that we can't imagine yet, which a 2D display simply can't deliver.
As for HIDs, we'll figure it out. Voice and touch will become far more useful and user-friendly. Remember how touch keyboards on smartphones were unbearable to use initially, and tech geeks like myself strongly preferred a device with a physical keyboard? Well, text prediction and haptics got a lot better, and we invented swipe typing, so the experience improved considerably. I'm typing this on a swipe keyboard from my phone, and while I would prefer to use a keyboard on a real computer, I also like being able to type with one hand from bed. :)
So I'm sure we'll invent input mechanisms that feel natural and friendly to use in VR as well. In the meantime you can also use a physical keyboard. There are many software developers who have adopted AR glasses, with a phone and keyboard as their mobile workstations. The tech is almost there.
If you think about it, a 2D board with keys you press to compose words is an archaic method of inputting data into a machine. It's a remnant from typewriters dating back to the 19th century. They're far from being an optimal method for doing the type of things we use computers for today.
Ultimately, we can have different opinions on whether we want these experiences or not, but the reality is that this future is inevitable, for better or worse. As we move towards transhumanism, fully immersing our visual sense in a digital world is an obvious first step. The current iteration of devices that we're used to is merely ~50 years old, and ~20 for mobile devices. It's far too early in our technological evolution to consider these the best designs we can produce.
Sure, but this is a different value proposition. FB paid $1B for Instagram, which was trendy, growing fast, and already had 30 million users. FB paid $19B for Whatsapp, which was already established worldwide with ~400 million users. These acquisitions were very much in-line with FB's core product. The people saying it was risky were mostly just saying that it was a waste of money and that FB could have just beaten their competition instead of buying them.
And bringing up VR is probably not the best comparison to make- sure, Meta is a leader here, and they are competitive with their AI team too. But "I'm sure it will have huge ROI in the near future" is just saying that it hasn't paid off and they don't have an obvious path to getting there. Shoving VR and the Metaverse into everyone's face hasn't paid off for several years, and the VR segment as a whole has remained niche despite being around for decades.
This acquisition is different- AI is not Meta's core product, it's just something hot right now and CEOs are trying to figure out how to stuff it into their products and hoping they can figure out how to make money later. Plus, they paid a pretty big chunk of money for a company that does, what? Cleans data for LLM training? Meta's Llama team clearly has a good data group already. They paid for a few employees that are clearly popular amongst the executives in the tech industry, but I don't know how this will go in terms of attracting other talent. Unless Wang is bringing something secret along with him, I think this one is an overpayment- Meta will need to both figure out how AI makes them money and Wang will have to attract several billion dollars worth of talent to the team. I'm skeptical that people will talk about this the same way they will about Meta getting Yann LeCun to work for them for a lot less money.
Facebook couldn't beat them on merit because it's not very good at what it does. It does, however, have money because it was good at one thing one time, and therefore it could solve its inability to execute with M&A.
'Laughed at', but one of the things that's probably very likely also true is 'Now a prime target for antitrust violations' especially Whatsapp
Acquisitions do happen but it's telling when the people whose company you bought publically disparage you (in other words it wasn't a peaceful takeover)
>If Meta is known for anything besides user privacy violations it's for taking risks that often pay off. [...] Their continued bet on VR is still highly criticized, yet they were the first Big Tech company in the space, they're the current market leaders, and I'm sure it will have huge ROI in the near future.
Are you using something that hasn't yet paid off as an example of how their big risks often pay off just because you are personally sure it will have huge ROI?
But I'm not actually sure I agree with the premise.
What risks is Meta known for taking? Instagram and Whatsapp purchases were defensive moves; they were laughed at for the prices not for risk.
Here they are similarly being laughed at for the price.
Is there much risk beyond that?
If Instagram had petered out and people had stayed on Facebook proper, they would've been fine. Same with Whatsapp. It's not like they've been trying to push people away from their core Facebook product. More the opposite - they've used acquisitions to try to push Facebook accounts to more people.
Compare to Apple, letting Mac software flounder for a while while focused on growing the iPhone and iPad business. Risky, worked out. Compare to Microsoft, going down years of dead-ends trying to come up with a next-gen operating system - a big part of their core bread-and-butter - and then having to release the generally-panned Vista because they bet too big on stuff they couldn't realize with Longhorn. Risky, failed. Compare to Snap, even - turning down Meta cash for independence. Risky, kinda meh results? But adding another social media app to a social media company's portfolio? Less so.
VR, on the other hand, does seem like the closest analog here. Buying their way into a non-core-competency space. There they bought the undisputed leader but it still hasn't paid off to date. Here? Eh....
What the commenter is saying is that this is no risk at all because $14B is negligible money for Meta at a year-long scale. It can always be written off as an investment that didn't work. In a company with $1.73T market cap, this is sometimes the loss you get in a single day of trading.
Yes, $14B can be considered negligible, but it's a signal. My bet is that it's not a great one. Wang has been great at courting clients, time will tell us about how that translate to leadership.
Meta already had an AI division led by the venerable Yann LeCun - someone with actual AI bona fides. I'm not seeing any info about what this does to LeCun's position in Meta.
I don’t think either Demis or Ilya are available for $15bn. They’re already both comfortably billionaires. Demis seems a sensible candidate for heir to the top job at Google in the long term. Ilya is away focusing on super intelligence.
It’s not clear to me why either would take a subservient role in a company flailing incoherently around AI, rather than stick with the incredibly high-leverage opportunities they both have now.
Spending $15B is a risk. Yes they have the money, but we're talking a quarter of Meta's annual income. That's not nothing.
And money concerns aside, Meta needs to be a major player in AI. If they have made the wrong bet with Scale AI & Wang then the company will suffer in the long term.
Honest question, why do they so existentially need to be a major player in AI? It's a social network that connects people, serves UGC and some spam/ads, and sells advertisement. Same but with photos for IG, same but with messages for Whatsap. Which part of this will die without AI? If they are obsessed with chatting with an AI bot on Whatsapp, just plug in grok or openai like Telegram, is that the killer feature worth bazillions of dollars?
(everything else seems like a failed experiment, VR, Libra, Facebook phone, whatever, nobody even remembers half these things)
You're thinking in the wrong scale. Meta is a $1.7T company, for them a $15B investment is less than 1% of the company. In the span of a year, this is negligible money.
I genuinely struggle to understand how that will affect him in any way. Not even any meaningful way, I mean, how could that possible change anything about his life, in any way?
I don't think people understand that once you're a billionaire with full ownership of your business and no risk of being ousted, making or losing billions is irrelevant.
Maybe, but it doesn’t seem to stop them from actually looking like dumbasses. But that wealth attracts fans who constantly proclaim that their latest idea is brilliant.
Maybe we should pity the poor billionaires, hopped up on T or ketamine and trapped in an echo chamber…but I’ll think they’ll be ok.
In light of these (accurate) critiques, I think I should've gone with my original wording, which referred to them still caring about their legacy regardless of how many billions they had. That's more what I was going for, but I dumbed it down, apparently too much.
The risk is the lost time by betting on the wrong horse. I don't know much about Wang, but the current phase of the AI race will likely shake out winners and losers of the tech industry who persist for many years to come.
Being first to achieve certain milestones matters a lot.
I actually ran into the Zuck eating Thai(could be wrong) food in Palo Alto at night. He was having dinner with his wife at the restaurants outdoor seating, sure looked risky for someone as important as him.
