Meta shares rose $100bn (£75bn) as investors welcomed Mark Zuckerberg's plans to curb spending at his struggling Metaverse unit.
Mr. Zuckerberg is planning a sharp 30% budget cut in the division, which has been growing. virtual reality (VR) gadgets and games, according to reports.
The Metaverse project has divided Wall Street, with some shareholders concerned about the costs involved. Meta's VR efforts have lost at least $70 billion since 2020, with $4.4 billion of that coming in the most recent quarter.
In a sign of concern, Meta shares rose their most since July on Thursday amid Mr. Zuckerberg's cost-cutting plan. They grew by 5.5%, adding $93 billion to the company's value.
The budget cuts will likely lead to job cuts at the division, which could happen as soon as January, Bloomberg reports.
The cuts were discussed at a meeting with senior Meta leaders at Zuckerberg's Hawaii residence last month, according to the report.
In 2021, Zuckerberg renamed Facebook Meta and began spending money on what he called “Metaverse” technology.
The innovation promised a kind of 3D Internet that would correspond to the real world.
Meta promised to create the virtual equivalent of social networks by launching a game called Horizontal worlds where players roam around as 3D avatars that can imitate the movements and speech of their hands.
The company has also launched services designed to cover VR education and workplace meetings.
However, this technology has largely failed.
Selling VR headsets is still a niche activity among tech enthusiasts. Few people are willing to spend a significant amount of time in virtual worlds with a headset, which in some cases can cause nausea.
Mr. Zuckerberg has quietly stopped mentioning the Metaverse in his public appearances and Instagram videos, instead promoting the Meta's artificial intelligence (AI) efforts.
The billionaire sought to regain lost ground in the race against OpenAI, ChatGPT developerlaunching AI chatbots and video creation apps.
Users can interact with the Meta AI digital bot on apps like Instagram and WhatsApp.
He also pledged to invest $600 billion in data centers across the U.S. by 2028 as the company strives to create even more powerful artificial intelligence software.
Increased company costs have fueled concerns about AI stock bubble as tech giants pour trillions of dollars into data center infrastructure as they race to lead the AI race.
