Meta, which rebranded a year ago to pursue its metaverse quest, reported an operating loss of $3.7 billion for its Reality Labs VR division. It saw revenue fall 49% from the prior year to $285 million, per Insider. Meta shares are down more than 61% this year in the wake of rising competition from TikTok and deflating ad sales.

Our take: The early days of the ongoing AI boom looked a lot like the metaverse boom of the previous two years, with executives and techies promising world-changing outcomes from the fledgling tech. But now that the hype has died down, we’re getting glimpses into how the world’s leading companies are viewing the technology. Those glimpses show that AI is no buzzword tech.

The Metaverse. As a concept, the metaverse holds immense potential as far as new display formats go. The possibilities are seemingly endless, from avatars bedecked in branded virtual apparel to virtual billboards to sensory entertainment experiences. If it achieves its full potential, the metaverse will almost certainly disrupt ad spending trends in a big way down the road.

Meta and AI: The tech giant was slow to seize on the AI trend, still reeling from shrinking ad revenues and floundering on how to pursue its metaverse dream. The new product from the company’s recently formed AI team will attempt to reduce the barrier to advertising on Meta’s platforms.

In the absence of quite so much buzz about the metaverse, this seems to have filled that void. However, there was some underlying conversation as to how AI could actually help power the next wave of the metaverse because obviously, AI can be used for everything, right? And one useful use of AI would be to do all the programming stuff behind the scenes for the metaverse. So who knows?

The big takeaway: While TikTok, augmented reality, and metaverse marketing opportunities are certainly flashier and worthy of headlines, a vast amount of time and effort goes into email marketing and TV advertising—and they’re not going away anytime soon.

Higher computing demands associated with AI, ML, complex simulations, and the metaverse will keep public cloud demand afloat. But major cloud providers will have to work harder to retain customers and attract new ones with discounts and incentives. The economic uncertainty also bodes well for cloud cost-management platforms like Finout that help companies reduce wasteful spending.

You’re probably already keeping a somewhat suspicious eye on marketing in the metaverse. But don’t let metaverse malcontents keep you from exploring gaming as a channel. AI’s Cambrian explosion will bring more complex tech to more companies, but AI has many more capabilities we don’t yet know about. James Vincent explained this complexity in The Verge, calling it “capability overhang.”

With $15 billion spent on the metaverse and not much to show for it, Meta CEO Mark Zuckerberg is steering the company toward multiple years of $10 billion in annual losses from its Reality Labs division, per CNBC. Anxiety is high among Google employees, with projects cut and investor TCI calling for layoffs.

Why Microsoft is still making this bet: Despite laying off its metaverse team in February—four months after its creation—Microsoft sees value in connecting the Edge browser to Web3. Microsoft has been beefing up the browser by adding things like BNPL financing options and a Bing button extension.

Meta’s stock plunged 71% in 2022 after the company spent $15 billion on building Zuckerberg’s vision for a VR metaverse. Our take: Multiple waves of layoffs are expected to hit Meta this year. Facebook, Instagram, WhatsApp, Facebook, and Reality Labs are just some of the businesses under Meta that may be affected, and rebalancing staff in each business unit will take time.

Article: Nike and Apple lean into the metaverse. Article: Snapchat’s new AR fitness feature may not be a hit with all adults. Methodology: Data is from the August 2022 "The Insider Intelligence Ecommerce Survey" conducted by Bizrate Insights. 1,034 US adults ages 18-65 were surveyed online during August 2-23, 2022.

Meta continues to account for the most US display ad dollars of any company, but its share will drop from 39.4% in 2021 to 30.4% in 2024, unless its metaverse can miraculously jump off. Meta’s ad dollars are headed to Amazon, TikTok, and CTV. This was originally featured in the eMarketer Daily newsletter. For more marketing insights, statistics, and trends, subscribe here.

The company has spent more money upgrading its AI tech to address the impact of Apple’s privacy changes than it has on its plans for the metaverse, according to a senior Meta staffer. Meta will continue growing its suite of AI-powered products with the launch of Lattice and AI Sandbox. Still strong: “Many people think that Facebook is old and tired and not relevant anymore,” Williamson said.

The big takeaway: Mastercard’s recently filed metaverse trademarks, new partnerships, and earlier Coinbase tie-up will build its presence in the NFT market and the broader digital asset space while also giving a potential volume boost if customers swap crypto wallets for payment cards.

Gen Alpha is experiencing the world in new ways (think TikTok, YouTube, and proto-metaverses like Roblox). The apps must find a way to promote financial literacy in a way that appeals to the way kids and teens interact with the world and absorb information, while also balancing the connection with the physical world.

I really couldn't find a discussion where generative AI didn't sneak into the conversation in some way, whereas the metaverse people are pretty tired of talking about. Zia Daniell Wigder:.

and so that is my prediction that Metaverse will make a comeback.

The company formerly known as Facebook spent billions of dollars building out its metaverse dreams this year, only to face online ridicule and massive layoffs. Meta’s revenue loss is a reflection of social media advertising struggles everywhere. As privacy and data collection face an uncertain future, advertisers are wary of social platforms.

Some brands are experimenting with augmented reality/virtual reality try-on tools and the metaverse to attract online shoppers, but so far consumers remain uninterested in the technologies. 5. Luxury is a top performer.

This would slow down development in processor-intensive technology like AR/VR metaverse applications, AI and machine learning, and cloud computing. This article originally appeared in Insider Intelligence'sConnectivity & Tech Briefing—a daily recap of top stories reshaping the technology industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily. Are you a client?

Meta spent $20 million on lobbying in 2021: Facebook’s parent company and metaverse hopeful spent a record amount on lobbying in 2021 as it faced accusations from a whistleblower as well as a year-end rebranding. Meta was one of the leading lobbying spenders in Washington, surpassing the likes of Lockheed and Boeing, per Politico.

AR has also let Snap tap into investor interest in the metaverse. But even though AR enjoys high penetration—over 25% of Americans will use AR this year, and half of US adults are interested in or have shopped via AR—that penetration means little if consumers and advertisers spend conservatively.

She noted that Meta’s success with AI is diverting attention away from the money hemorrhaged by metaverse-focused Reality Labs, which saw a $3.74 billion operating loss in Q3, also contributing to even more layoffs during 2023’s “year of efficiency.”. Meta said it will still nurture Reality Labs, which specializes in AR and VR, despite its 26% drop in revenues YoY to $210 million.

Article: Meta gives parents control of teens’ metaverse. Article: Digital gamers powered up during the pandemic.