Meta's Mark Zuckerberg - no slowdown in AI spend, no panic about DeepSeek, and no shame about abandoning fact-checking

In a break with the norm, diginomica has of late afforded unaccustomed praise to  Meta’s Mark Zuckerberg for doling out tough love to Wall Street and informing the short termists that the road to AI profit is long and expensive. That hasn’t changed, with yesterdays quarterly financial results analysts call seeing a reiteration of capital expenditure plans to build out the company’s AI infrastructure.

Turning in Q4 revenue of $48.39 billion, up 21% year-on-year, and net income of $20.84 billion, up 49%, Zuckerberg confirmed:

We're planning to invest $60-65 billion in CapEx this year while also growing our AI teams significantly, and we have the capital to continue investing in the years ahead.

What has changed since Meta last reported numbers is the eruption of DeepSeek onto the AI landscape, delivering an open-source AI model that outperformed some Meta, OpenAI, and Anthropic models in third-party benchmarks and was spun up at a fraction of the development costs of rival models.

This caused a run on Wall Street earlier in the week as investors panicked about the prospect of the Chinese newcomer undermining US prospects in the AI arms race, but Zuckerberg is taking a ‘wait and see’ position:

I think there's a number of novel things that they did that I think we're still digesting. And there are a number of things that they have advanced that we will hope to implement in our systems. That's part of the nature of how this works, whether it's a Chinese competitor or not. I kind of expect that every new company that has a launch is going to have some new advances that the rest of the field learns from. That's sort of how the technology industry goes.

As for DeepSeek’s seeming cost advantages, he commented:

It's probably too early to really have a strong opinion on what this means for the trajectory around infrastructure and CapEx and things like that. There are a bunch of trends that are happening here all at once. There's already a debate around how much of the compute infrastructure that we're using is going to go towards pre-training versus as you get more of these reasoning time models or reasoning models where you get more of the intelligence by putting more of the compute into inference, whether, just [how that] will mix the shift how we use our compute infrastructure towards that.

That was already something that I think a lot of the other labs and ourselves were starting to think more about and it already seemed pretty likely even before this, that of all the compute that we're using, the largest pieces aren't necessarily going to go towards pre-training.

But don’t looking for Meta to put the reins on its own AI spend, he warned:

That doesn't mean that you need less compute, because one of the new properties that's emerged is the ability to apply more compute at inference time in order to generate a higher level of intelligence and a higher quality of service. That means that as a company that has a strong business model to support this, I think that's generally an advantage. We’re now going to be able to provide a higher quality of service than others, who don't necessarily have the business model to support it on a sustainable basis.

The other thing is just that when we're building things like Meta AI [and] we're implementing AI into all the feeds and ad products and things like that, we’re serving billions of people, which is different from [a situation where] you start to pre-train a model, and that model is sort of agnostic to how many people are using it. At some level, it's going to be expensive for us to serve all of these people, because we are serving a lot of people. So I'm not sure what the kind of net effect of all of this is

He added:

I continue to think that investing very heavily in CapEx and infra is going to be a strategic advantage over time. It's possible that we'll learn otherwise at some point, but I just think it's way too early to call that. And at this point, I would bet that the ability to build out that kind of infrastructure is going to be a major advantage for both the quality of the service and being able to serve the scale that we want to.

Open source

Zuckerberg did argue that one thing that will probably be encouraged by DeepSeek is the rise of an open source AI global standard, explaining:

On open source, I think the best analogy for us is what we did with open compute, where we weren't first to building the system. By the time that we got around to building it, it wasn't really a big advantage to have it be proprietary. So we shared it and then a lot of the industry adopted what we were doing, contributed innovations back to it. By standardizing it on it, that meant that a bunch of the supply chain standardized on building it, which made prices more efficient for everyone.

I think what we see here is as Llama [Meta’s open source AI model] becomes more used, it's more likely, for example, that silicon providers and other APIs and developer platforms will optimize their work more for that and basically drive down the costs of using it and drive improvements that we can, in some cases, use too. So I think that the [open source] strategy will continue to be effective and I continue to be optimistic on this. I think it's working.

It’s also important if the US is not to lose leadership status in the global AI landscape he added:

For our national advantage, it's important that it's an American standard. So we take that seriously, and we want to build the AI system that people around the world are using and I think that if anything, some of the recent news has only strengthened our conviction that this is the right thing for us to be focused on.

My take

A pragmatic assessment of the lay of the AI land from Zuckerberg that hasn't emulated the 'The Chinese are coming!" hysteria that has gripped too many commentators. 

The other Meta news of the day was that the firm has caved into Donald Trump and agreed to pay $25 million penance for suspending his accounts following the Capitol insurrection riots. In recent weeks, Zuckerberg has gone out of his way to fall in line with the stance of Trump 2.0 as the new administration in Washington beds in. He’s now pledged:

This is going to be a big year for redefining our relationship with governments. We now have a US administration that is proud of our leading companies, prioritizes American technology winning, and that will defend our values and interests abroad. I'm optimistic about the progress and innovation this is going to unlock.

Sentiments to warm the MAGA heart, no doubt. But critics have suggested that the price of winning a seat at the Trump table has been a high one, not least in the shape of abandoning any pretence of third party fact-checking on Facebook in favor of an X-style community notes approach to which anyone can contribute anything they like, true or false. Zuckerberg is unapologetic:

I’ve believed in free expression for quite a while. People don't want to see mis-information, but you need to build an effective system that gives people more context. I think what we found over time is that the community note system is just going to be more effective than the system that we had before. I'm not afraid to admit when someone does something that's better than us. I think it's sort of our job to go and just do best work and implement the best systems.

So I think that there's been a lot of people who have read this announcement is if we somehow don't care about adding context to things that are on our platform that are mis-information. That’s not right. I actually think that the community note system, like what X has had for a while, is actually just more effective than what we were doing before. And I think our product is going to get better because of it.

Even if society isn’t…