| | | Meta’s Plan to Leap Ahead in the AI Race | | By Jeff Brown, Editor, The Bleeding Edge | | | | Why bother with artificial general intelligence (AGI)? | | Why not just go straight to superintelligence (ASI)? | | That’s precisely the message Meta CEO Mark Zuckerberg is sending with his latest organizational changes made in the last couple of days. | | When most of us think of Meta, we think of it as a social media company. After all, Meta owns Facebook, Instagram, and WhatsApp. | | But Meta is actually a tech-centric advertising company. It derives almost 99% of its revenues from selling advertising space on its application platforms. | | This is what turned Meta into a $1.78 trillion company sitting on $70 billion in cash and generating tens of billions in free cash flow every year. This year, Meta will generate $34.2 billion in free cash flow, which is actually significantly lower than last year’s $52 billion. | | And there’s one reason for that… Its ambitions are far greater than advertising. |
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| Skipping Over AGI | | Meta is spending at record levels on both data center infrastructure and software development for artificial intelligence. | | That’s what has directly impacted its free cash flows. And despite spending more than $100 billion on developing AI, Meta has been significantly behind companies like Google, Anthropic, and xAI in the race to artificial general intelligence. | | For one of the largest, cash-rich, and most powerful tech companies, this has been a sore point for Meta that left analysts wondering what Meta might do to catch up. | | Now we know. | | A couple of weeks ago, Meta absolutely aped into a deal, spending $14.3 billion to acquire only 49% of Scale AI – a high-growth AI service company that focuses on data annotation and AI training data for companies looking to build AI models. | | It’s an incredible figure that implies a $28.6 billion valuation for Scale AI – a company that was worth just $1 billion back in 2019. | | But it was the deal structure that was telling. | | Meta knew it couldn’t get away with an outright acquisition of Scale AI. Scale AI was a neutral party and a critical service provider to the industry. An all-out acquisition would have almost certainly caused major antitrust issues. I doubt the deal would have gone through. | | So Zuckerberg acquired 49% to avoid antitrust problems. But the key part of the deal was that Scale AI’s CEO Alexandr Wang will leave Scale AI and join Meta as its Chief AI Officer. | | Then, just a couple days ago, we learned that Zuckerberg has established a new division of Meta now known as Meta Superintelligence Labs (MSL) to be led by Wang. | | The name says it all… | | Meta knows it has fallen behind in the race to AGI. So it’s stepping up to put a team together to develop the next frontier AI model, something beyond AGI. | | Meta is gearing up to build an artificial superintelligence. | | But don’t take my word for it, here it is directly from Zuckerberg: |
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| As the pace of AI progress accelerates, developing superintelligence is coming into sight. I believe this will be the beginning of a new era for humanity, and I am fully committed to doing what it takes for Meta to lead the way. |
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| And he was clear about why he believes Meta can do it: |
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| Meta is uniquely positioned to deliver superintelligence to the world. We have a strong business that supports building out significantly more compute than smaller labs. We have deeper experience building and growing products that reach billions of people. |
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| And there is no question that Meta is pulling out all the stops and spending whatever it takes to put together a team that might be able to pull it off. | | In addition to Zuckerberg’s “acquihire” of Alexandr Wang for $14.3 billion, he also pulled in Nat Friedman from Microsoft, who himself was “acquihired” by Microsoft for $7.5 billion in 2018 when Microsoft acquired GitHub. | | Friedman will be helping to lead the new Meta Superintelligence Labs with Wang. | | And that’s just two names. Here’s who else is joining Meta to hopefully achieve its ASI ambitions: | | Seven key software engineers who have created various parts of OpenAI’s frontier models.A key engineer at Anthropic.Three key players from Google, two of whom come from Google’s DeepMind subsidiary. | | And I’m sure there are far more in the works. | | But what comes next might be hard to believe. |
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| All in on ASI | | For the very top talent, Meta is offering packages as high as $300 million over four years and more than $100 million in payouts in the first year. Other team members, like those I listed above, are rumored to be receiving packages around $10 million a year (base, bonus, and equity combined). | | Never in my decades in high tech have I ever seen executive recruiting at this level. | | Anyone who has actually built a frontier model, or any leading AI company, is invaluable in this environment. And these kinds of comp packages are only possible because a handful of companies out there have so much capital available to them that they can afford these astronomical packages. | | But let’s not let these extraordinary compensation packages distract us from the far bigger story. | | “Developing superintelligence is coming into sight.” | | Many in the industry are starting to believe that artificial general intelligence is now becoming a near-term event. This is a prediction that I’ve made for quite some time. We’re already seeing sprouts of AGI. | | Something very big is right around the corner, and I predict that xAI’s Grok 4 – which is expected to be released shortly after July 4 – is going to leap far ahead of the rest of the industry. Many will suggest that Grok 4 is an early version of AGI. | | We’re so close… | | Which is why Meta isn’t setting its target on such an imminent technology. It is assembling a team to build, and hopefully lead, what’s coming next… | | … namely, artificial superintelligence. | | Jeff | | |
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| Softbank Leans In | | Softbank’s Masayoshi Son has quietly shaped more of the modern tech world than most people realize… |
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