00:00CEO Mark Zuckerberg told Bloomberg Muse that Spark 1.1 includes a new paid tier for developers.
00:07Well, let's get more on this now with Bloomberg's Kurt Wagner, who spoke with Zuckerberg.
00:11Kurt, give us some of the finer details. What did Mark tell you?
00:16Yeah, I mean, this is a model that is an updated MuseSpark.
00:22MuseSpark was already out. This is MuseSpark 1.1, as you mentioned.
00:24But I think the big thing here is that for the very first time, they're going to sell access to
00:30this model to businesses and developers.
00:32They have that API that we've sort of been waiting for that a lot of the other AI companies already
00:36offer.
00:37And so this is a direct revenue stream for them.
00:39And one of the things that we spent a lot of time talking about when I chatted with Zuckerberg was
00:44the pricing and the fact that he really wants to go cheap on the pricing.
00:48One, because he thinks that the competitors are too expensive.
00:55Two, because he's trying to get this model into as many hands as possible.
00:59And the cheaper he does that, the cheaper he makes it, the more likely that is to happen.
01:03So this is very much a classic meta strategy, make things as cheap as possible for as much distribution as
01:09possible.
01:09So on one hand, they have this new way of generating revenue with this AI model.
01:13And Kurt, you and the team also learning earlier in the month that they're also now setting up a cloud
01:18business, too, to sell AI compute.
01:20How much of this is just trying to escape this trap that meta is in with its shares now into
01:26a bear market about can you get a return on investment that all the meta, all the spending and capex
01:31that meta is currently undergoing?
01:36I think this has been the biggest concern from investors over certainly the last six months is, hey, you're spending
01:42aggressively, you're making these big commitments, you're doing the things on paper that AI companies should be doing.
01:46But what is the plan to make all that back?
01:48And so that was a real concern a few months ago when they reported first quarter earnings.
01:54Since then, we've seen them come out with a consumer subscription for their AI chatbot, they're charging for AI agents,
02:00they're building, you know, setting the framework internally for a potential cloud enterprise business, maybe they're even going to sell
02:04some of the compute that they've accumulated.
02:06So they're really, you know, setting up all of these various businesses around AI that didn't exist just two, three,
02:13four months ago.
02:14And if you're an investor, you have to be saying at the very least, OK, we know where the company
02:19plans to get some of that investment back, which was not necessarily as clear at the beginning of the year.
02:24Yeah, it didn't seem like the likes of Zuckerberg ever cared that much about where shares were trading.
02:29But meta has really had a terrible run, you have to say, Kurt.
02:34What did he say about that?
02:36Well, he essentially asked him about morale at the company.
02:39I said, look, you know, you did these big layoffs, a lot of internal restructuring with AI.
02:45And he kind of just chalked it up to times of change.
02:48You know, there is going to be disruption when you have a technology as big, powerful and influential as AI
02:54sort of come into the mix.
02:55And they are using AI in a way that they weren't six months ago.
02:58Their engineers are using it to build products and app features.
03:01They're obviously trying to adjust the human side of the business to match the technological side of the business.
03:07So he kind of just chalked that up to, hey, this is what happens in times of disruption.
03:11But I do think it's hard to ignore not only the stock price, but what that does to morale inside
03:16the company.
03:17We've certainly seen reports and heard rumblings from employees that things are not great there.
03:22But, you know, a strong business and a good stock price usually fixes a lot of that stuff.
03:28Well, it wasn't really that long ago, Kurt, just quickly here that Meta was paying top dollar for AI engineers.
03:34How is the race in the competition for talent currently unfolding?
03:40I think that it's still going to be competitive.
03:42We see people jumping from, you know, OpenAI to Anthropic to Meta to Google.
03:46Like we see this sort of musical chairs of AI talent.
03:49I do think they're more settled than they were.
03:51Obviously, last year they were building this new lab essentially from scratch.
03:54So they had to go out and spend aggressively on all these people.
03:57They have the leadership in place with Alexander Wang there.
03:59So I don't think they're doing quite as much of that as they were.
04:02But I think there's always going to be a bit of a musical chairs with the talent just because it
04:07is so unique.
04:07And the people with those skill sets are so in demand still.
04:10So I don't think we're seeing quite the eye-popping prices we saw last summer.
04:15But I think there's still a lot of interest there if you have that skill set.
04:18So I think there's still a lot of interest in the competition.
04:18So I think there's still a lot of interest in the competition.
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