Meta is preparing to slash its metaverse budget by about 30%, according to Bloomberg, signaling a sharp pivot as the company doubles down on AI and other revenue-generating technologies. The move marks one of the biggest strategic retreats since Meta rebranded from Facebook in 2021 with an ambitious pledge to build immersive virtual worlds that would redefine social interaction.
The spending cut reflects a cooling appetite for metaverse investments across the tech industry, where slow consumer adoption and high development costs have weakened confidence in VR and AR-driven platforms. Meta’s metaverse division, Reality Labs, has also accumulated massive losses in recent years, intensifying pressure from investors to shift resources toward more immediate growth areas.
With AI now dominating the competitive landscape, Meta is aligning its resources toward advanced AI models, agents, and infrastructure that promise faster returns. The company has publicly emphasized that AI products, from chatbots to creator tools and recommendation engines, are delivering stronger user engagement and advertising performance than its metaverse initiatives.
The budget reduction does not signal a complete exit from the metaverse, but rather a scaling back of long-term experiments that are no longer seen as central to Meta’s short-term strategy. Hardware work on headsets and glasses is expected to continue, though at a more conservative pace.
Meta’s shift mirrors a broader industry trend where tech giants are reassessing large-scale virtual world projects in favor of AI, cloud computing and practical mixed-reality use cases. The future of the metaverse now appears less expansive, and far less funded, as corporate priorities hard-reset toward technologies with clearer demand and profitability.
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