According to TechSpot, Meta CEO Mark Zuckerberg is backing away from his multi-billion dollar metaverse obsession. The company is planning to slash the budget of its Reality Labs division by 30%, with cuts hitting as early as January 2026. This division, which houses the Horizon Worlds platform and VR hardware, has reported staggering operating losses totaling around $70 to $75 billion since late 2020. A Meta spokesperson confirmed a shift in investment away from the metaverse toward AI glasses and wearables, like the recently unveiled second-generation Ray-Ban Meta smart glasses. The market reacted positively, with Meta’s stock rising 3.4% on the news of the strategic retreat from a project that has been a financial black hole for years.
The $70 Billion Reality Check
Here’s the thing: seventy billion dollars. That’s not a typo. It’s an almost incomprehensible sum of money to burn on a vision that, for most people, never materialized as anything more than a clunky VR chatroom. Zuckerberg‘s unwavering faith was legendary. He renamed the entire company, for crying out loud. He commissioned reports predicting a trillion-dollar future. But the generative AI revolution stole the metaverse‘s thunder completely. The industry found a new, seemingly more tangible toy, and Meta, like everyone else, had to chase it. So now, the metaverse gets the budget axe. It’s a brutal but utterly predictable end to a famously stubborn experiment.
From Metaverse to AI: Another Costly Pivot
Now, of course, the money isn’t disappearing. It’s just being rerouted. Meta has raised its 2025 capital expenditure forecast to about $70-72 billion, heavily linked to AI infrastructure. So we’re essentially swapping one massive bet for another. Zuckerberg’s recent quote is telling: “If we end up misspending a couple of hundred billion dollars, I think that that is going to be very unfortunate, obviously. But what I’d say is I actually think the risk is higher on the other side.” He’s basically admitting that colossal, potentially wasteful spending is just part of Meta’s core strategy. The risk isn’t in losing billions; it’s in not spending enough to maybe, possibly, catch the next wave. It’s a philosophy of extreme financial aggression that would give any traditional CFO nightmares.
A Lesson in Tech Hype Cycles
This whole saga is a masterclass in the tech industry’s hype cycle. A CEO becomes personally enamored with a concept. The company goes all-in, rebrands, and spends with wild abandon. The press and analysts play along for a while. But then, user adoption doesn’t follow the hockey-stick curve. The technology remains awkward. And when a shinier object (AI) appears, the pivot is swift. The metaverse isn’t dead, but it’s being demoted from “defining obsession” to “side project.” The real question is whether AI will be different, or if we’ll be reading a similar post-mortem in 2030 about how Meta wasted another hundred billion on large language models. Given the track record, would you bet against it?
