Meta CEO Mark Zuckerberg told investors on the company's second quarter earnings call that the company sees significant potential in selling artificial intelligence (AI) tools directly to businesses, marking
a shift for a company that has historically built its fortune on advertising rather than enterprise sales.
A new business beyond advertising
Zuckerberg said Meta's enterprise AI ambitions extend well beyond the business agent the company launched in June for handling customer service and daily operations. He told investors that the company sees a large market for selling APIs, business agents, and even direct compute capacity to large customers, alongside other services it is building. "We expect to build a large business for large businesses," he said on the call, adding that Meta has "more coding and product tools on our roadmap."
Compute capacity at the centre of strategy
Much of the discussion on the call centred on whether Meta should sell its spare computing capacity to other companies or hold onto it for its own AI ambitions. Zuckerberg said the company is fielding a lot of offers for compute at a significant premium over what it paid for it. However, he cautioned against rushing to cash in. "It would be foolish to basically just sell all of the compute and take a short-term profit," he said. He described Meta's approach as a portfolio strategy that balances short-term revenue opportunities against the company's own long-term infrastructure needs as it works toward what he called personal superintelligence.
A different muscle for Meta
Zuckerberg acknowledged that pursuing enterprise customers would require the company to build capabilities it has not historically had. He said the shift would flex "a different muscle than we've historically had," but argued the financial opportunity was too significant to pass up, pointing to API services and productivity tools alongside compute sales as part of the broader opportunity.
Betting on returns from AI spending
The comments came as Meta faces investor scrutiny over its ballooning AI infrastructure spending. Chief financial officer Susan Li told analysts that selling Meta's technology to other companies would help the company generate returns on that spending, and said the payoff would become clearer over the next couple of years, according to a report on the call. Zuckerberg said Meta's AI investments were already "accelerating every part of our core business," even as the company prepares to sell the technology to outside businesses as a new revenue stream.
Mixed market reaction
Despite Zuckerberg's confidence, Meta's free cash flow for the quarter fell to its lowest level in at least five years, a sign that the company's aggressive AI capital expenditure continues to weigh on near-term profitability even as it lays the groundwork for a new enterprise business. The remarks come at the same time as Microsoft posted its own strong quarterly results, with its Azure cloud business crossing 100 billion dollars in annual revenue, underscoring how enterprise AI has become the central battleground among Big Tech companies this earnings season.
