Meta doubles down on AI hiring and acquisitions after costly missteps
Meta is spending big to catch up in the AI race. After splashing $14.3 billion on Scale AI last week and snapping up founder Alexandr Wang, Meta plans to hire former GitHub CEO Nat Friedman and Daniel Gross, ex-CEO of $32 billion AI startup Safe Superintelligence, CNBC reports.
Meta even tried buying Safe Superintelligence, founded by OpenAI co-founder Ilya Sutskever, and held talks to acquire $14 billion-valued Perplexity AI. These moves follow Meta raising 2024 capital expenditures to $64-$72 billion, largely for AI data centers and hardware. 
CEO Mark Zuckerberg said on the April earnings call, "The major theme right now, of course, is how AI is transforming everything we do." But insiders say Meta’s recent AI efforts, especially the Llama 4 model launch, flopped badly.
Gil Luria from D.A. Davidson said:
"On the heels of a successful rollout of Llama 3 a year ago, Llama 4 that came out this year was an absolute failure, almost by his admission."
"Meta can’t afford to fail in having the leading AI model. So they’re out in the marketplace desperately trying to replace their AI team right now."
Meta wants Friedman and Gross working under Wang, boosting its AI product line. The company also took a stake in Friedman and Gross’s venture firm NFDG.
OpenAI CEO Sam Altman revealed Meta is wooing OpenAI staff with signing bonuses up to $100 million and huge annual packages.
Meta CTO Andrew Bosworth told CNBC the talent war is “really incredible and kind of unprecedented”:
"The market is setting a rate here for a level of talent which is really incredible and kind of unprecedented in my 20-year career as a technology executive."
Wall Street is watching closely. Meta shares are flat this week but up 17% for 2024, beating peers. Argus boosted Meta’s price target to $790. They noted Meta’s ability to boost ad targeting with generative AI as a major upside.
Analyst Gil Luria compared Zuckerberg’s current AI gamble to past bold acquisitions like Instagram and WhatsApp:
"The last time Mr. Zuckerberg felt like he was under the gun," he said, referencing Meta’s $1 billion Instagram and $19 billion WhatsApp purchases.
"He’s going to rebuild the team and they’re going to come back."
Meta declined to comment on the new hiring plans but promised updates soon.
