A source who has seen the 2026 budget plans said the company will yank cash from the metaverse and hurl it at artificial intelligence wearables. Several tech outfits, including the Fruity Cargo Cult Apple, are already sniffing around wearables as the next big computing platform, and Meta does not want to look slow.
The shift marks a sharp U-turn from 2021, when Zuckerberg renamed Facebook as Meta Platforms to show how convinced he was about the metaverse. Reality Labs has burned through more than 77 billion dollars since 2020, and investors have lost patience with the never-ending binfire.
Meta’s share price jumped more than three per cent once word of the cuts leaked. A spokeswoman said: “Within our overall Reality Labs portfolio, we are shifting some of our investment from metaverse toward AI glasses and wearables given the momentum there.”
Zuckerberg has been pushing executives to trim budgets for years. However, he is now concentrating on the metaverse group because its immersive tech has failed to attract users in any meaningful way, the source said.
He still drags the metaverse out for occasional praise. In January, he told investors that 2025 would be a “pivotal” year for the metaverse and promised their long-term work would “start to land,” he said.
Bloomberg earlier reported the planned cuts. The metaverse bet has struggled from day one. Internal documents leaked a year after the rebrand revealed glitchy software, bored users and no one able to explain what success might look like. Zuckerberg said the shift to a more immersive online world would take years, although even that now feels generous.
Artificial intelligence has bulldozed the conversation, and most tech bosses now swear blind it will reshape how consumers use tech and how the industry squeezes revenue from them. Meta is prioritising AI projects, including a wave of AI glasses. In June, Zuckerberg created a Superintelligence division and started waving around $100 million pay packets to lure researchers. About 50 hires have already joined.
Meta’s Ray Ban AI glasses, built with hardware partner EssilorLuxottica, have picked up speed. The firm said earlier this year that it has sold more than two million pairs and plans to increase capacity to ten million pairs a year by the end of 2026.
Investors are watching Meta’s AI transformation like hawks. To streamline things, the company said internally in October it would axe about 600 jobs across long-term AI research teams, although the pricey new hires are untouched. Weeks later, Meta shares dipped when it warned of “aggressive” capital spending to stay alive in the AI arms race.