Amid the DeepSeek Frenzy, Meta Plans to Invest "Hundreds of Billions of Dollars" in AI

Nitin Konde, Varun Bhardwaj

01 Feb 2025 — 3 min read

Meta to Invest Hundreds of Billions in AI Amid DeepSeek Frenzy

Mark Zuckerberg, the CEO of Meta, isn't overly concerned about DeepSeek's ascension, even though the Chinese AI lab's rapid rise has shocked Wall Street and Silicon Valley. In fact, Zuckerberg stated on January 29 that Meta's open-source strategy, which is based on the large language model (LLM) Llama, has "strengthened our conviction that this is the right thing for us to be focused on."

"There's a number of novel things that they did that we're still digesting... a number of advances that we will hope to implement in our systems, and that's part of the nature of how this works," Zuckerberg stated on the company's earnings conference call. Every new firm that launches, whether or not it is a Chinese competitor, will have some new innovations that the rest of the industry may learn from, according to the head of Meta.

DeepSeek’s Gain Causing Tremors Among Established Players

With its boasts of creating a model that can compete with top-tier models from American companies like OpenAI, Meta, and Google for a fraction of the cost, DeepSeek has thrown Wall Street into a collapse over the past week, especially with regard to AI-related equities. Investors were alarmed by this since IT companies were spending billions of dollars developing their AI models and goods.

Zuckerberg stated during the earnings call that he continues to think that making significant investments in infrastructure and capital expenditures will eventually provide a competitive edge. "It's probably too early to have a strong opinion on what this means for the trajectory around infrastructure and capex," he stated.

Meta’s Plan to Outrun its Competitors

According to Zuckerberg, Meta plans to spend "hundreds of billions of dollars" on AI infrastructure in the long run. He declared last week that Meta will increase its AI efforts by investing between $60 billion and $65 billion in 2025. According to him, a large portion of the compute infrastructure will probably transition from the pre-training stage to creating strong "reasoning" models and superior products that will be sold to billions of customers.

Because you can "apply more compute at inference time in order to generate a higher level of intelligence and a higher quality of service," Zuckerberg stated that this "doesn't mean you need less compute."

"As a company that has a strong business model to support this, I think that's generally an advantage that we're now going to be able to provide a higher quality of service than others who don't necessarily have the business model to support it on a sustainable basis," he stated.

Launch of Llama 4 in the Upcoming Month

In the upcoming months, Meta intends to release Llama 4 with native multimodal and agentic capabilities. "Llama 4's training is going really well. Pre-training for Llama 4 mini is complete, and both our reasoning models and the larger model appear to be doing well," Zuckerberg stated.

"With Llama 3, we wanted to make open source competitive with closed models, and with Llama 4, we want to lead," he continued. Zuckerberg said that it will be feasible to create an AI engineering bot with coding and problem-solving skills comparable to those of a competent mid-level engineer by 2025.