Meta keeps lighting cash on fire for AR/VR, and AI isn’t helping

Meta’s Reality Labs division is still a money pit, and the numbers are getting harder to ignore. The latest quarterly report shows the unit lost another $4.5 billion, bringing its total losses since 2020 to well over $50 billion. That’s not a typo.

Mark Zuckerberg has been adamant that AR/VR is the future, and he’s willing to wait. But patience is expensive. The Quest headsets aren’t flying off shelves, and the Ray-Ban Stories smart glasses were a dud. Horizon Worlds, the metaverse platform Meta bet big on, still feels like a ghost town.

Now add AI to the mix. Meta is pouring money into large language models, AI chips, and data centers to keep up with Google and Microsoft. That’s not cheap. The company’s capital expenditures are projected to hit $35 billion this year, much of it driven by AI infrastructure. Combine that with Reality Labs’ losses, and you’ve got a serious cash incineration problem.

Some of this spending makes sense. AI can improve ad targeting, content recommendations, and even help with the Quest’s hand tracking. But the core issue remains: Meta hasn’t shown it can turn either AR/VR or AI into a real business. The ad business is still funding everything, and that’s a fragile foundation.

I get the vision. Zuckerberg wants to own the next computing platform, and he’s willing to lose money for years to get there. But at some point, investors will start asking hard questions. The stock is already down 15% this year, and the narrative is shifting from “long-term bet” to “money furnace.”

What’s frustrating is that Meta could have taken a more measured approach. Instead of trying to do everything at once, they could have focused on one thing—say, AI for ads—and let AR/VR simmer. But that’s not Zuck’s style. He wants to be the guy who bet big and won, even if it means burning through billions.

Will it pay off? Maybe. But the clock is ticking, and the burn rate isn’t slowing down.