Zuckerberg hopes for 'pivotal' year for Metaverse, promising AI 'surprises'

Reality Labs, the virtual and augmented reality arm of social media giant Meta Platforms, keeps increasing its losses, while Meta's CEO Mark Zuckerberg says this year will be pivotal for the Metaverse and that the company has AI-related "surprises" in store.

Reality Labs' losses in the last quarter of 2024 amounted to $4.97 billion, or 7% more than in the fourth quarter of 2023. Meanwhile, revenues for the same period increased by 1% to $1.083 billion.

Nevertheless, Zuckerberg remains optimistic about the future of the Metaverse.

"The number of people using Quest and Horizon has been steadily growing — and this is the year when a number of the long-term investments we've been working on to make the Metaverse more visually stunning and inspiring will really start to land," the CEO said during the earnings call. Quest is a line of virtual reality (VR) headsets, while Horizon is a virtual reality game.

Meanwhile, during a separate call, Meta's chief financial officer (CFO), Susan Li, said the company anticipates that operating losses in Reality Labs will continue growing in 2025.

She explained that Reality Labs' investments are spread across two categories: 1) Metaverse, which includes VR, mixed reality (MR), and social platform initiatives, and 2) Wearables, which includes augmented reality (AR) and AI glasses.

"We expect that in 2025, roughly half of our Reality Labs investment will go toward Wearables initiatives and the remaining half toward the Metaverse," Li said, admitting that the company still needs to overcome "a deep set of technological challenges" to bring scalable consumer products to market.

Wearable devices are expected to be the primary driver of Reality Labs' increasing operating losses in 2025.

"And that really comes from our efforts to further accelerate the adoption of our AI glasses products," Li added.

Speaking of AI, Zuckerberg said he expects 2025 to be the year when a highly intelligent and personalized AI assistant reaches more than 1 billion people.

"I expect Meta AI to be that leading AI assistant," he said, claiming that Meta AI is already used by more people than any other assistant.

Outlining AI-related plans, the CEO noted that people want their AI to be personalized, and the company has some unspecified “fun surprises" for this year.

"I also expect that 2025 will be the year when it becomes possible to build an AI engineering agent with coding and problem-solving abilities equivalent to a good mid-level engineer," Zuckerberg said, emphasizing that this will be "a profound milestone and potentially one of the most important innovations in history."