Meta may launch cloud business to compete with AWS and Google

Meta is reportedly planning to go beyond social media and AI by entering in one of the most competitive markets of technology industry. As per reports coming from Bloomberg, the tech giant is exploring ideas regarding launching its own cloud computing business. This will allow other companies to rent its AI infrastructure along with computing power. Also Read: Meta launches its most affordable smart glasses: Check price, features and availability

If this happens, then it would put Meta in direct competition with cloud computing giants like Amazon Web Services, Google Cloud, and Microsoft Azure. Additionally, it will also challenge newer AI-focused infrastructure company called CoreWeave. Also Read: Facebook AI Mode launched: Meta's new search tool uses public posts to answer questions

Meta looking ways to generate massive AI investments

Over the past few years, Meta has invested billions of dollars in artificial intelligence, building large data centres, buying thousands of Nvidia GPUs and hiring top AI researchers. But those investments haven’t yet produced much in the way of direct revenue. Also Read: Meta reportedly testing Hatch AI agent to compete with OpenAI and Anthropic: Report

Bloomberg reports that now Meta is looking at leveraging its AI “infrastructure” as a money-spinning venture by providing cloud services to developers and enterprises.

An alternative that is being floated is for developers to be able to access AI models running on Meta’s infrastructure, but only for the computing power they use, just like Amazon Bedrock does with AWS.

The other option is to rent underutilized compute resources from Meta’s data centers to businesses that require such heavy compute resources for AI training and inference. This would allow Meta to shift its focus from ads to becoming a cloud infrastructure company.

Meta Compute says it’s spearheading the project

The program is being worked on in the company’s internal initiative called Meta Compute, which centers on the company’s expanding artificial intelligence infrastructure and data center activities, the report adds.

The business model is said to be still under development; it is important to note that this might not be the same once they officially announce it. Meta has yet to officially confirm the report.

AI spending increases in Meta

As big technology firms look for ways to recoup the massive expense of building generative AI, the Zuckerberg family has announced its own cloud aspirations with Meta.

In late 2022 when ChatGPT was released, companies around the world have seen a dramatic uptick in their spending on AI chips, servers and data centres.

Meta is one of the leading investors involved in this race. The company earlier this year said it was willing to invest as much as $145 billion in AI infrastructure in 2026. Meanwhile, CEO Mark Zuckerberg has stated that Meta may spend $600 billion on AI in total by 2028 and even more if the advancement of AI progresses even faster.

The beginning of a cloud business could prove to be a source of revenue for Meta based on existing infrastructure.

Meta still has a way to go in the race for AI

Even with its aggressive spending, Meta still has to make up ground with top AI firms like OpenAI, Anthropic and Google.

Earlier this year, the company unveiled its latest AI model, Muse Spark, which reportedly has not yet been made available to developers. The company has also been reported to have no confirmed launch date so far, as it faces challenges in getting its latest Artificial Intelligence (AI) models to market.

The lags have sparked concerns that Meta will be unable to keep up with rivals despite its significant investments in personnel and facilities.

Zuckerberg previously teased cloud plans

This concept of pivoting Meta’s AI platform to become a cloud company isn’t anything new.

At Zuckerberg’s shareholder meeting in May, he indicated that businesses often contact Meta to gain access to its AI models and available computing power. He said that the move into the cloud era is an idea “definitely on the table,” indicating it’s a subject that’s been on the agenda for some time.

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The plan, if it is to be put into practice, would mark one of the largest business expansions in years for the company, and one that would generate revenue outside of digital advertising. It would also directly drive the cloud computing domain more competitive, considering that Amazon, Microsoft and Google already feature prominently in that segment, while the demand for infrastructure for artificial intelligence is growing rapid.