Meta called the deal with Zuckerberg its “Founder Alignment Agreement,” saying it was “critically important” to keep him leading the company from California given the “dramatic and unprecedented transformation taking place in the tech industry and global economy related to artificial intelligence.”
The company alluded to problems the company experienced during the Covid-19 pandemic, when Zuckerberg began working outside of the office and mostly from his large compound in Kauai, Hawaii.
After a surge in hiring at Meta during the pandemic, a whistleblower scandal that led to renewed focus on child safety, and a refocus within the company to building out the “metaverse,” which included renaming the company Meta from Facebook, the company began mass layoffs and restructuring.
Layoffs have continued into this year. The company’s headcount is down 15% from a year ago, meaning it has shed at least 10,000 workers.
Today, the company has moved away from the “metaverse,” or virtual platforms, and is more focused on artificial intelligence products and related tools.
With Zuckerberg leading the company’s efforts to catch up in the AI race, Meta’s board said it sees a future of “tremendous market opportunity” for the company.
Major tech companies are set to spend an estimated $1 trillion, external this year alone developing AI and the costly infrastructure around it, like data centres.
Meta said on Wednesday it planned to spend as much as $145bn this year on AI projects. The company has increased the amount it expects to spend on AI each financial quarter so far this year.
It is spending so much on the technology that it posted negative cash flow for the first time since the company went public 14 years ago. Cash flow represents the money a company retains after paying for operations and investments, meaning Meta is now spending more money than it is bringing in.
And the company intends to spend even more in the year ahead. Susan Li, Meta’s chief financial officer, said on Wednesday that another benefit of the stock split would be to give the company more ways to finance future spending on AI work.
The degree of the company’s spending on AI, without an clear new revenue stream coming from it, appeared to spook investors on Thursday.
Meta’s shares fell more than 7%, wiping more than $100bn off of the company’s market capitalisation, a key metric used worldwide to measure the value of a publicly-traded company.
