Meta has started selling AI subscriptions to chatbot and social networks. The shares jumped by 4%
The pilot regions were Singapore and two Latin American countries
Subscriptions to services bring only a small share of Mark Zuckerberg's business empire's revenue / Photo: Facebook/Mark Zuckerberg
Meta for the first time began selling user subscriptions to the Meta AI chatbot - this is another way to offset some of the huge costs of artificial intelligence, which amount to hundreds of billions of dollars. The market reacted positively to the news: shares of Mark Zuckerberg's holding company jumped by almost 4% in New York on May 27.
How much does it cost to subscribe and what's inside
The company offered two plans: for $7.99 and $19.99 per month. They give Meta AI users "more power" and allow them to send "more complex queries," Meta's head of product Naomi Gleit explained in an Instagram video. Free access to Meta AI will remain, but users will face limits when generating images and videos. Subscriptions are launching in Singapore, Guatemala and Bolivia in the first phase, with the company planning to expand the number of markets later.
Meta is also preparing premium Plus plans for the main social networks: Facebook and Instagram Plus will cost $3.99, and WhatsApp Plus will cost $2.99. For businesses and content creators, Meta One Essential ($14.99) and Advanced ($49.99) packages have appeared. In the most expensive tariff added tech support with live people - previously the lack of such communication with customers created serious problems for advertisers on Meta platforms, notes Bloomberg.
Why it's important
Investors have long been pressing Mark Zuckerberg to prove that spending on neural networks will bring the company real money. This year, Meta's capital expenditures may reach $145 billion, and the corporation will spend a significant part of these funds on AI projects, Business Insider recalls. In April, Wall Street reacted with a sell-off on the news that the company's investment spending this year will exceed the initial forecast.
The launch of paid subscriptions to AI services is Meta's attempt to increase revenues outside of the advertising business. While the company has been convincing the market that investment in AI pays off through more accurate and effective advertising, subscriptions to chatbots have already become a common monetization model among Meta's competitors - Google and OpenAI, Bloomberg states.
So far, paid services bring Meta barely noticeable income. In the first quarter, the "non-advertising" revenue (which includes subscriptions and sales of gadgets such as smart glasses and VR-helmets) amounted to only $1.29 billion. The corporation earned over $55 billion from advertising during the same period, the agency notes.
What Wall Street thinks of Meta stock
American investment bank Wells Fargo, one of the largest in the U.S., last week lowered its annual benchmark on Meta shares to $765 from $770 per paper, but continued to recommend them for purchase - with an "above market" rating (Overweight). According to S&P, none of the stock analysts advise to sell Meta securities - now they have 57 positive ratings (Buy and Overweight) with seven neutral (Hold).
This article was AI-translated and verified by a human editor
