Meta has rolled out its latest AI chatbot to more countries and introduced an updated version powered by Llama 3. The chatbot is accessible through its dedicated website, Meta.AI, and can also be conveniently used across Meta platforms such as Facebook, Instagram and WhatsApp.
This introduces another AI chatbot into the competition, challenging OpenAI’s ChatGPT position. However, I am not convinced that it can permanently win over users. In my view, an alternative needs to be significantly better to disrupt an existing product-customer relationship.
The only obvious difference is that Meta AI is free, while ChatGPT requires a paid subscription to access the latest data, the most advanced model, and the image generation features offered by the company. Meta provides the most powerful and updated answers for free, and yes, it also allows you to generate high-quality images at no cost.
I am not sure that offering the service for free can effectively attract users away from ChatGPT. While it might appeal to those who are price-sensitive, the real advantage for Meta lies in its large user base and the integration of AI chat across all its platforms, which could lead to some adoption. The most promising platform appears to be WhatsApp, given its ubiquity and high frequency of use. People already use WhatsApp for daily chats, so integrating an AI chat feature could seamlessly transition into everyday use, potentially enhancing adoption rates. In this context, I believe WhatsApp poses the biggest threat to ChatGPT.
Additionally, Meta AI will incorporate Bing and Google search results to provide the most up-to-date information. This might come as a surprise, especially considering that Microsoft, a major shareholder in OpenAI, and Google, with its Gemini project, are competitors.
The likely answer lies in the cloud business. Meta uses Microsoft's Azure and Google Cloud to support its AI ambitions. Given the scale of Meta's operations, it is a valuable customer that both Microsoft and Google are eager to retain. In exchange, Meta's AI models are available on both cloud platforms. This arrangement is mutually beneficial. While the outcome of the AI race remains uncertain, the cloud revenue is immediately realizable. This scenario is akin to selling shovels during a gold rush, which is often a smarter and more lucrative strategy.
Meta will eventually need to find a way to monetize its AI service, as running AI functions is costly. While I don’t think it will adopt a subscription-based model, it may instead align with the advertising model used by Facebook and Instagram, where advertisers pay to reach their audience. This could involve AI learning from users' inputs during chats to develop profiles for ad targeting. Additionally, ads could be embedded directly in the responses provided by Meta AI, offering advertisers another avenue to reach customers.
Regardless of what happens next, this is a positive development for Meta. The AI theme remains popular, so Meta capitalizing on it could potentially drive its share price higher.
Hi Alvin, i kind of agree that META new AI may not be a big deal for the general user out there, unless it is conveniently available with Whatsapp usage. Just a case in point: i used to go to Chat.ai in the past, but now i just used BARD/Gemini on my Google browser instead, because Google is still my regular go-to desktop browser for everything....so over time i become a Gemini user instead of Chat-GPT. Fyi.