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Zuckerberg Bets Big on AI as VR Burns Cash; Tesla Kills Flagships

Meta Shifts Focus to AI Amidst VR Losses, While Microsoft Profits from OpenAI

Meta is pivoting towards artificial intelligence, with CEO Mark Zuckerberg announcing plans for new AI models and products in the coming months, while its virtual reality division, Reality Labs, continues to bleed money. This strategic shift comes as Microsoft reported a significant financial gain from its investment in OpenAI.

Zuckerberg stated on Wednesday's investor call that Meta had "rebuilt the foundations of our AI program" in 2025 and expects to "steadily push the frontier over the course of the new year." He highlighted AI-driven commerce as a key area of focus, envisioning "new agentic shopping tools" that will help users find products within Meta's catalog. This focus on AI signals a potential shift away from the metaverse, with Zuckerberg seemingly embracing AI as "the new social media," according to The Verge.

However, Meta's VR endeavors continue to struggle. The company's earnings report revealed that Reality Labs lost $19.1 billion in 2025, slightly more than the $17.7 billion lost in 2024, according to TechCrunch. In the fourth quarter alone, the unit posted a loss of $6.2 billion against sales of $955 million. Despite these losses, Zuckerberg remained optimistic about the company's VR technology during the earnings call.

Meanwhile, Microsoft is reaping the benefits of its investment in OpenAI. The software giant reported a $7.6 billion increase in net income from its stake in the AI lab, TechCrunch reported. Microsoft has invested over $13 billion in OpenAI and reportedly has a 20% revenue share agreement with the company. OpenAI is currently seeking additional funding at a valuation between $75 billion and $830 billion, according to Bloomberg.

In other news, Tesla CEO Elon Musk announced the end of production for the Model S sedan and Model X SUV during the company's quarterly earnings call on Wednesday. The final versions of both electric vehicles will be made next quarter, and Tesla will offer support for existing owners, Musk said. The company plans to use the factory space previously used for Model S and Model X production to build Optimus robots. "It's time to basically bring the Model S and X programs to an end with an honorable discharge, because we're really moving into a future that is based on autonomy," Musk stated.

AI-Assisted Journalism

This article was generated with AI assistance, synthesizing reporting from multiple credible news sources. Our editorial team reviews AI-generated content for accuracy.

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