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Updates at 23:00 ET (03:00 GMT) with context on Meta AI spending, investor concerns
Investing.com-- Meta Platforms (NASDAQ:META) has halted hiring in its artificial intelligence (AI) division after a months-long spree of hiring more than 50 AI researchers and engineers, the Wall Street Journal reported on Wednesday.
The hiring freeze took effect last week and also came amid a broader restructuring in the AI division, the WSJ reported, citing people familiar with the matter. The restructuring also prohibits current employees from moving across teams in the division.
The duration of the freeze also appears to be indefinite.
Meta shares were down 0.3% in premarket trading Thursday as of 06:24 ET (10:24 GMT).
Meta was seen embarking on an AI hiring frenzy this year, offering nine-figure salaries to poach talent from other major AI developers, including OpenAI. The company was also seen using so-called reverse acquihires to strip start-ups of their key talent.
The company was also seen picking up its efforts to build AI superintelligence with a new team overseen by CEO Mark Zuckerberg, where a bulk of its new hirees were placed.
The recent restructuring will see Meta divide its AI efforts into four teams, the WSJ report said. One team– called TBD Lab– will work on superintelligence, a second will work on AI projects, a third will work on infrastructure, and a fourth will be dedicated to long-term projects and research.
The fourth team, called Fundamental AI Research, was also unaffected by Meta’s restructuring, the WSJ report said.
Meta has repeatedly overhauled its AI operations this year, as the internet giant seeks to overtake its Wall Street peers in developing the most advanced AI models. CEO Zuckerberg had become personally involved in assembling a team to further the company’s superintelligence efforts earlier this year.
The Facebook owner had poached employees from several other tech majors, including OpenAI, Google (NASDAQ:GOOGL), and Apple (NASDAQ:AAPL), and had also hired executives from AI startups such as Scale.
Zuckerberg had reportedly offered Thinking Machines Lab co-founder Andrew Tulloch as much as $1.5 billion to join Meta.
The company is part of Wall Street’s so-called AI Hyperscalers, a group of tech megacaps spending hundreds of billions of dollars on developing new AI models and building more data center capacity. Meta by itself has earmarked as much as $72 billion on AI spending this year.
But this trend of outsized capital spending grew into a major investor concern in recent weeks, with shareholders questioning whether increased expenses and the stock-based compensations offered by Meta stood to hurt overall returns on investing in the company.
A report from the Massachusetts Institute of Technology, released earlier this week, claimed that 95% of AI ventures remained unprofitable, raising even more doubts over AI spending. This sparked a nearly 5% rout in Meta’s share so far this week.