The tech giant Meta is significantly increasing its capital expenses, with a new estimate of between $35 and $40 billion, which is $5 billion more than the original projection of $30 to $37 billion. This increase is not only due to AI research and product development efforts but also from legal costs. Meta is currently facing legal issues, including an antitrust lawsuit and lawsuits from 33 states alleging that the tech giant is negatively impacting children’s mental health.
In addition to these legal costs, Meta expects significant increases in Reality Labs’ operating losses. This division of Meta focuses on human-computer products through virtual reality headsets and augmented reality glasses. Analyst Max Willens noted that it’s not surprising that Meta adjusted its guidance, as companies investing heavily in AI may face challenges with costs in the short term. Despite these challenges, Meta continues to invest aggressively in AI research and product development efforts, with expectations for full-year total expenses for 2024 being higher than previously anticipated. The company predicts a range of $96 to $99 billion compared to the prior outlook of $94 to $99 billion.