When you think of META, you might think of Facebook, Instagram, or even, shudderingly, the Metaverse. But the social media company has quickly become one of the biggest names in artificial intelligence, alongside the likes of OpenAI, Microsoft (MSFT), and Google (GOOG, GOOGL).
Meta’s AI success is driven by the Llama family of models that the company is deploying across a variety of social platforms, including the Meta AI assistant for Facebook, Instagram, and WhatsApp. Businesses are also using Llamas. In August, Meta reported that organizations ranging from Accenture (ACN) and DoorDash (DASH) to Goldman Sachs (GS) are using Llama to develop their own AI software.
But Meta isn’t just implementing AI into its products. The company also offers the Llama model as open source software. Open source software is generally software that companies create and make available for developers to download and extend for free. This is in contrast to, for example, OpenAI, which uses a closed-source software approach for its GPT family of models.
All of this has helped make Meta a powerful force in the AI field and a potential threat to AI rivals.
“If Llama didn’t exist, OpenAI and [Google’s] Gemini will be in a better position,” Gene Munster, managing partner at Deepwater Asset Management, told Yahoo Finance. “I have no doubt that without Llama, some developers would have been forced to go to Gemini or GPT.”
However, the AI industry is still in its infancy, and it is unclear which companies will be the big winners in the long run.
Meta’s AI strategy should bring many benefits to the company in the short and long term. The company will be able to immediately apply Llama models to its products, helping them improve their products while proving the software’s value in real-world scenarios.
After all, if Meta uses that model in their products, why shouldn’t third-party developers use it? Also, since the Llama family is open source, developers can see inside the software and address defects and risks over time.
“Meta is democratizing AI, open sourcing it, and leveraging what we are building on our platform,” said Futurum Group CEO Daniel Newman. “They’ve really worked on every layer.”
AI control? Mark Zuckerberg will talk about Meta AI at the Meta Connect conference in September. (AP Photo/Godofredo A. Vasquez) (ASSOCIATED PRESS)
Of course, Llama will not only help Meta improve its existing software and build goodwill among developers, but it could also become a steady source of revenue in the long run.
“We want to open this up, but if you’re a company like Microsoft or Amazon or Google and you’re basically going to resell these services, you can take some of the revenue by doing that. I think we need to get it,” Mehta said. Mark Zuckerberg said this at Meta’s 2023 Q3 earnings conference. “Those are the deals we’re going to make, and we’re starting to do them little by little.”
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Zuckerberg said he doesn’t think these deals will significantly contribute to Meta’s bottom line at this point, but he expects them to do so in the long term.
Over the past 12 months, Meta’s stock price is up 85%, while Microsoft and Google are up 25% and 18%, respectively. Analysts say the company’s stock is well priced relative to its earnings, but expectations for how AI will enhance the social media company’s products could provide a tailwind. .
Meta’s suite of open source models may give it a competitive edge, but that doesn’t mean it will displace OpenAI, Google, Microsoft, Anthropic, or the many other companies vying for position in the AI wars. . game.
“It’s competitive in terms of a cheaper and better alternative for developers,” Munster said. “This is the most advanced and cheapest alternative.”
And just as Meta’s model continues to evolve, so do our competitors’ models. Rivals OpenAI and Anthropic have funding deals with Microsoft and Amazon (AMZN), respectively, providing them with the cash they need for years of growth.
Google also has the advantage of offering its Gemini platform on hundreds of millions of Android smartphones around the world, but OpenAI will be coming to iPhones via Siri in the coming months.
Consumers will also be able to take advantage of Meta’s AI services through a family of apps, but users may find it easier to summon their device’s built-in AI assistant rather than opening a third-party app. Sho.
Still, with over 3.27 billion daily active users across its family of apps, Meta has plenty of unique opportunities.
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Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter @Daniel Howley.
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