In Reply to: Google and Meta may be generating more income. posted by mh on September 28, 2025 at 14:39:39
> Althought I don't understand what it means to "move their ad business to AI", I doubt the income comes close to their AI expenses.
Basically their last 2 quarters, revenue was better than expected because they are using AI rather than their previous model to pick which ads their customers see. They are getting better click through rates.
From Google on Facebook's increased revenue:
"Facebook (Meta's) annual revenue significantly increased in 2024, reaching $164.5 billion, a jump of 22% year-over-year from $134.9 billion in 2023. This growth was driven by higher ad impressions and prices across Meta's platforms, which also saw a 5% increase in average daily users. Key factors contributing to this increase include the effective monetization of its large user base and the successful integration of AI into its ad systems to improve efficiency and ad conversions
...
Increased Ad Demand:
Advertisers are seeing more efficiency and higher conversion rates due to improved AI models.
Meta's AI-powered recommendation models are unlocking greater gains and efficiency across its ad systems.
The company effectively monetizes its vast user base across its Family of Apps, including Facebook, Instagram, and WhatsApp."
While for most companies like IBM or Amazon via Palentir their investment in AI is at a pure loss, Google and Facebook are having their investment offset by revenue gains.
Companies like Apple/Uber are not making investments in AI because they figure that whomever wins the AI wars will need an interface to interact with their customers. As long as they are that interface, they can charge a vig for access to AI without paying the cost of development.