Bloomberg Tech Meta Stock Surges on Plans for Metaverse Cuts
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Dec 5, 2025 Meta is making significant cuts to its metaverse budget, focusing instead on augmented reality and AI hardware. Nvidia's CEO expresses doubts about China's acceptance of advanced AI chips amidst regulatory challenges. Meanwhile, tech giants like Snowflake and Salesforce reveal their latest earnings, with insights into market adaptations and the growing competition in AI. The hosts also explore consumer behavior shifts affecting Meta's strategies, hinting at a future where smart glasses may take center stage.
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Meta Shifts From Metaverse To AI Hardware
- Meta is planning heavy cuts to its immersive metaverse budget, potentially up to 30%, as part of 2026 planning.
- The move signals a strategic refocus from virtual worlds toward AI and AR glasses as higher-priority hardware bets.
Glasses Over Full Virtual Worlds
- Meta will continue hardware work but de-emphasize immersive virtual products while investing in AI-driven glasses like Ray-Ban smart frames.
- The company still hires top design talent and pursues AR glasses as a more promising consumer form factor.
Reallocate CapEx Toward Monetizable AI
- Reallocate capital from low-return moonshots into AI initiatives that offer clearer revenue paths.
- Prioritize projects with nearer-term monetization and sustainable free cash flow impact.