00:00Mark Zuckerberg did not sound like he had a lot of conviction in its AI strategy when he spoke on
00:04the earnings call.
00:05Yeah, I mean, this is the issue, I think, with Meta.
00:08It's lumped in with all these hyperscalers that we talk about so much.
00:11But really, it's not the same as those other companies.
00:14Amazon has a cloud business. Google has a cloud business, which grew 60% year on year in these earnings.
00:19Meta comes along and it's spending in the same arena as those companies, up to $145 billion, it says, in
00:26CapEx for the year.
00:28And yet, when it goes to investors to say, here's the result of that, it can't say, here's a lovely
00:33big cloud business, which every time we add to it, we know we're going to get revenue in return.
00:38Meta doesn't have that. Instead, what it has is an AI strategy, which, as you say, is wishy-washy, to
00:44be polite.
00:45He was on the investor call yesterday evening, didn't really have, to my ear, a sort of firm grasp on
00:51what exactly his AI is going to do for people, and more importantly, for the business.
00:55So how it's actually going to make money from doing that, particularly when it's in this battle with ChatGPT, Claude,
01:01all these others.
01:02I think it's looking pretty difficult for Meta at the moment.
01:04Nevertheless, Meta is going to continue to spend.
01:07It raised its CapEx budget, and we are reporting that Meta is looking to sell up to $25 billion in
01:13investment-grade bonds.
01:14And we're learning right now that it's seeing massive, massive demand.
01:17There's a recent headline that Meta drew peak demand of about $96 billion for this U.S. bond sale.
01:22When it comes to funding its CapEx needs, do you think that investors are wondering where the endpoint is for
01:30Meta continuing to boost its budget here?
01:32Because, like you said, there is no cloud business to plow into.
01:36Yeah, I mean, look, Meta, and they did bring this up yesterday, they've always underestimated how much computing they need
01:41just to run its kind of existing business.
01:43So there is this view, and Mark Zuckerberg has said this multiple times, that it won't be necessarily a problem
01:48to have too much computing power for its own business, given that it still hosts billions of users around the
01:55world.
01:57I guess what's going to be the question is, is it going to need so much computing power if its
02:03own AI isn't going to be a major player?
02:05And that's what I'd have doubts on if I was backing some of these efforts, particularly when, like I say,
02:11there's other players that are not only creating AI for themselves, like Google, but they're also selling the ability for
02:16other businesses to use AI as well,
02:18which certainly in this, I think, near to medium term is where the revenue is coming from.
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