Meta Platforms (META +4.16%), formerly known as Facebook, has been at the forefront of numerous technological advancements, including social media networking and others.
Now, it is leveraging artificial intelligence (AI) to secure its leadership in the tech industry. Here's a closer look into the impact of AI on Meta's operations and the exciting opportunities it presents.
Image source: Getty Images.
AI will help improve user experiences
One of Meta's most significant competitive advantages is its huge base of over 3.8 billion monthly active users (MAUs) across its platforms, including Facebook, Instagram, and WhatsApp, making it the dominant force in social media networks.
Its massive user base, however, means that the company can no longer count on increasing the number of MAUs for growth. Instead, it has to focus on keeping these users engaged so that they keep returning for its services. The key, therefore, is to focus on delighting users with ever-improving experiences.
Al plays a vital role here. For example, AI algorithms can analyze users' preferences and interactions to deliver personalized content feeds. This personalization could help users discover content they find interesting, leading to a more engaging and tailored experience.
AI-powered recommendations can suggest groups to join on Facebook, Instagram, and WhatsApp, expanding user networks. And Meta Platforms has introduced AI into features like chatbots, virtual assistants, and real-time translation.
While many of these uses are not new, we can count on Meta introducing even more AI-enabled features to please its 3.8 billion users. A satisfied user base, in turn, keeps Meta's advertising engine going.
NASDAQ: META
Key Data Points
AI and advertising
AI is not only vital in user engagement, it also is key to advertisers' success. And as advertisers succeed, so will Meta's ad business.
Meta uses AI to offer advanced ad targeting and personalization to help marketers get more results out of their advertising budgets. AI algorithms analyze vast user data -- such as demographics, interests, and behaviors -- to target ads and improve their relevance to users.
AI also helps businesses better monitor their ads' performance by continuously analyzing data and using it to recommend ways to optimize their strategies and allocate resources more efficiently, thereby maximizing the impact of their ads.
Meta recently introduced AI Sandbox, a set of tools that includes generative AI, allowing advertisers to make multiple versions of texts for different audiences, create images from words, and more.
AI and the metaverse
It is no secret that Meta Platforms has a massive crush on the metaverse. Herein lies the problem: The road to the metaverse is complex, uncertain, and costly.
But AI can solve many problems for the company. For example, it can help create more realistic and immersive experiences across hardware technology like augmented reality and virtual reality. It can also personalize the metaverse by leveraging users' past actions and preferences.
More importantly, AI will help Meta reduce its cash burn. The company spent $13.7 billion on this segment in 2022, but with generative AI, it can save a lot on software development, marketing, and other expenses.
Meta is the AI stock to watch
AI is a crucial answer to Meta's present and future.
It can keep its users coming back and help its advertisers market more efficiently. More importantly, as Meta Platforms ventures more deeply into the metaverse, AI will enhance the realism of the experience, making it more personal, while improving cost efficiency.
The next decade is going to be about AI, and it will help make Meta Platforms a key player to watch.
