Meta to cut up to 30% of metaverse budget, Bloomberg News reports

Core Viewpoint - Meta is expected to implement budget cuts of up to 30% for its metaverse initiative, which has seen significant financial losses since its inception, leading to a 4% rise in its shares as investor concerns eased [1][2]. Group 1: Budget Cuts and Financial Impact - The proposed cuts are part of Meta's annual budget planning for 2026, with potential layoffs as early as January [2]. - The metaverse initiative has burned more than $60 billion since 2020, prompting a shift in strategy to align costs with a less optimistic revenue outlook [1][3]. Group 2: Market Position and Product Development - Meta has struggled to sell its vision of an immersive metaverse and expand its device market beyond gaming, although it has gained an early lead with its smart glasses [4]. - Competitors like Alphabet, Apple, and Snap have not successfully capitalized on the smart glasses market, allowing Meta to maintain a competitive edge [4]. Group 3: AI Initiatives and Spending - Meta is also focusing on artificial intelligence, having committed up to $72 billion in capital spending this year, as part of a broader industry trend where large tech companies are expected to spend around $400 billion on AI [5]. - The company reorganized its AI efforts under Superintelligence Labs, with aggressive talent acquisition strategies led by CEO Mark Zuckerberg [6].