Since launching on Sept. 8, Meta Platforms' (META -0.31%) Muse has quickly become one of the most popular personal artificial intelligence (AI) agent tools on the market. It reached 5 million downloads in the U.S. faster than OpenAI's ChatGPT did after its release in late 2022. Investors are pleased that the Magnificent Seven stock is showing real AI progress.
Here's one reason the Meta Muse AI agent has an upper hand over rivals.
Image source: The Motley Fool.
Muse makes money from higher-usage subscription tiers and, eventually, transaction fees. There are no in-app ads. For a business that raked in $59.4 billion in advertising sales in the second quarter (98% of its total), this appears to be a strategic pivot.
But Meta can still make money indirectly from its advertising machine. It can gather data from Muse activity to show relevant ads across its family of apps ecosystem, which has 3.6 billion daily active users.
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A rival personal AI agent from a pure-play AI enterprise, like Instinct, doesn't have a lucrative legacy operation like Meta does. It needs to generate revenue soon, as running agents can incur significant infrastructure costs. So, it might have no choice but to introduce ads within the agent interface.
This move will certainly irritate people who want a clean user experience. And it can push them to Muse, further strengthening Meta's competitive position.
