Prominent economist Dean Baker has launched a sharp critique against Meta CEO Mark Zuckerberg, stating the tech titan essentially flushed $77 billion down the drain with his aggressive bet on the Metaverse. In a recent newsletter, Baker labeled the massive investment into virtual reality as a foolish decision with significant consequences beyond the company's balance sheet.
A 'Stupid' Investment with Societal Costs
Baker, who co-founded the Center for Economic and Policy Research, published his thoughts in a piece titled "Did Mark Zuckerberg Throw $77 Billion of Our Money into the Toilet?" While he acknowledges that companies make poor investment choices regularly, he argues the scale of Meta's Metaverse gamble makes it different.
"The flip side to this story is that when companies make stupid investment decisions, as it seems Zuckerberg did with the $77 billion he threw into Meta, it is not just a loss on their books, but also a cost to society," Baker wrote. He explained that vast resources were diverted into the project.
This includes the time of highly skilled software engineers, planners, and support staff, as well as physical assets like office space, computing equipment, and electricity. Baker contends these resources "could have otherwise been productively employed." He even suggested that construction materials used for Meta's expansion could have helped build affordable housing in the expensive San Francisco Bay Area.
AI Boom's Double-Edged Sword
Baker also used his critique to warn about the ongoing artificial intelligence investment frenzy. He noted that while the AI boom is reshaping the US economy by driving growth and absorbing top talent, it comes with heavy strains.
A major concern he highlighted is the immense pressure on power grids from energy-hungry AI data centers. This surge in electricity demand, Baker argues, further complicates national and global climate change goals, creating a challenging trade-off between technological advancement and environmental sustainability.
Meta Doubles Down on AI with New Acquisition
In a related development underscoring its strategic pivot, Meta has announced the acquisition of artificial intelligence startup Manus. As reported by the Financial Times, this deal ranks as Meta's third-largest acquisition ever, following its monumental purchases of WhatsApp and ScaleAI.
This move highlights CEO Mark Zuckerberg's aggressive push into advanced AI as Meta races to catch up with rivals like Google and OpenAI. Manus, which has Chinese roots, is recognized as a leading developer of autonomous general-purpose AI agents capable of performing complex tasks such as market research, coding, and data analysis.
In a statement, Meta confirmed it will "operate and sell the Manus service" while integrating its sophisticated technology into existing products, including the Meta AI chatbot. This acquisition signals a clear redeployment of focus and resources following the costly Metaverse venture.
The twin narratives of Baker's stark criticism and Meta's new AI purchase paint a picture of a tech giant course-correcting after an extraordinarily expensive foray into the virtual world, now channeling its efforts into the competitive arena of artificial intelligence.
