Remember the Metaverse? Now It's 'AI and the Metaverse'

Before generative AI shook everything up, the metaverse was the next big thing. Now, it's "AI and the metaverse."

For those with short attention spans, a social media company named Facebook changed its name to Meta, with company CEO Mark Zuckerberg saying the name change reflected the company's focus on the metaverse, a virtual world or digital realm where people can interact in a variety of immersive, three-dimensional settings, even when they are not being physically together.

The aim was to enhance the feeling of presence, making digital interactions feel more like real-life experiences so user avatars could engage in activities such as learning, shopping, working and playing.

We Believe
[Click on image for larger view.] We Believe (source: Meta).

It was all the rage in the IT space, with all three cloud giants -- Microsoft, Amazon and Google -- being involved in various ways.

It became much less of a thing with the arrival of generative AI, but Meta is still pushing the metaverse concept, though now taking pains to associate it with the next hot new trend, AI.

That was evident in Meta's recent quarterly earnings report, where Zuckerberg addressed the company's huge investments into the technologies (which caused a huge stock price drop).

According to the recent Q1 2024 earnings call transcript for Meta Platforms, Inc., Zuckerberg mentioned the metaverse three times -- but only in the context of AI:

  • We've also made good progress on our AI and Metaverse efforts and that's where I'm going to focus most of my comments today.
  • Now in addition to our work on AI, our other long-term focus is the Metaverse.
  • Now in addition to AI and the Metaverse, we're seeing good improvements across our apps.

It was much the same in the Feb. 1 earnings call for Q4 2023, where Zuckerberg mentioned the metaverse five times, only in the context of AI:

  • 2023 was our year of efficiency, which focused on making Meta a stronger technology company and improving our business to give us the stability to deliver our ambitious long-term vision for AI and the metaverse.
  • Now we have 2 major parts of our long-term vision, and in addition to AI, the other part is the metaverse. We've invested heavily in both AI and the metaverse for a long time, and we will continue to do so.
  • And I think that smart glasses are going to be a compelling form factor for this, and it's a good example of how our AI and metaverse visions are connected.
  • In addition to AI in the metaverse, we're continuing to improve our Apps and Ads businesses as well.

The financial world didn't think much of metaverse investments, as the earnings call caused a big drop in the company's stock price, as reflected in articles like:

We asked about the metaverse, making for kind of a Q&A:

Is the metaverse still a thing?
Meta AI: Yes, the metaverse is still a thing, even though it's not as popular as it once was. The metaverse is a virtual space where people can interact with each other and digital objects using avatars and virtual reality technology. The metaverse has a lot of potential uses, such as in gaming, social media, and education, but it's still in the early stages of development. Here are some of the reasons why the metaverse isn't as popular as it once was:

  • Unmet expectations: The metaverse was hyped up to be a revolutionary technology that would change the way we interact with each other and digital objects. However, the current state of the metaverse is not as advanced as people expected, leading to disappointment and a decrease in interest.
  • Consumer reluctance: The metaverse is a new and unfamiliar technology, and many people are hesitant to try it out. This is especially true for older adults who may not be as comfortable with technology.
  • Technological and financial setbacks: The metaverse requires a lot of technological infrastructure, such as high-speed internet and virtual reality headsets. However, these technologies are not yet widely available, and the cost of investing in them can be prohibitively expensive.
  • Corporate pullback: Some companies, such as Disney, have pulled back on their metaverse projects due to a lack of interest and technological challenges.
  • Generative AI surge: The recent surge in popularity of generative AI has shifted attention away from the metaverse and towards other technologies.

Is the metaverse still a priority for meta?
Yes, the metaverse is still a priority for Meta. Here are some reasons why:

  • Financial investments: Despite operating losses, Meta is still investing heavily in the metaverse, with Reality Labs reporting an operating loss of $7.7 billion on sales of $616 million in the first half of 2023 [unverified].
  • Product development: Meta is releasing new products and features, such as the next-gen Quest 3 headset and the expansion of Meta Horizon OS to third-party developers.
  • Strategic direction: Mark Zuckerberg has emphasized that the metaverse and AI are key priorities for Meta, with a focus on building a next-generation computing platform.
  • Long-term vision: Meta views the metaverse as a long-term investment, with Zuckerberg stating that it may take several years for the metaverse to reach scale and profitability.
  • Integration with AI: The metaverse and AI are increasingly interconnected, with AI services like Meta AI being integrated into metaverse products like glasses and headsets.

Should third-party companies or individuals such as developers who invested resources into the metaverse be worried?
Third-party companies and individuals, such as developers, who invested resources into the metaverse should be aware of the current situation and adjust their strategies accordingly. Here are some reasons why they should be cautious:

  • Reasons to be cautious:
    • Uncertain future: The metaverse's future is uncertain, and it's unclear if it will gain mainstream adoption.
    • Shifting priorities: Meta and other companies may adjust their priorities, potentially leaving third-party projects without support.
    • Technological challenges: The metaverse faces significant technological hurdles, including scalability, security, and user experience.
    • Financial risks: Investing in the metaverse can be costly, and returns are not guaranteed.
    • Platform changes: Meta's evolving metaverse strategy might lead to changes in its platform, potentially affecting third-party projects.
  • Mitigating risks:
    • Diversify investments: Spread investments across multiple platforms and technologies.
    • Stay agile: Adapt to changing circumstances and Meta's evolving priorities.
    • Communicate with Meta: Engage with Meta's developer teams to understand changes and opportunities.
    • Focus on innovation: Continuously innovate and improve products and services to stay competitive.
    • Monitor industry trends: Keep a close eye on industry developments and adjust strategies accordingly.

    By being aware of the potential challenges and taking steps to mitigate risks, third-party companies and individuals can navigate the dynamic metaverse landscape and make informed decisions about their investments.

AI, of course, can be subject to hallucinations.

About the Author

David Ramel is an editor and writer for Converge360.


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