[DigitalToday Seung-a Yoo] Meta set next year as the point when it expects profitability to improve in its loss-making artificial intelligence (AI) and hardware businesses.

On Oct. 21 local time, Business Insider reported that Meta CEO Mark Zuckerberg (Mark Zuckerberg) said on the third-quarter earnings call that the AI assistant Muse and Reality Labs are not currently generating profit, but he expects profitability to improve from next year.

Meta generates more than 97 percent of its quarterly revenue from advertising. Investors have repeatedly questioned when its AI and hardware businesses will be able to generate profit.

Zuckerberg said the AI assistant Muse, launched last month, is not currently profitable because it requires massive computing resources to operate. Meta plans to sharply improve computing efficiency from next year to change its profit-and-loss structure. Zuckerberg said computing efficiency is likely to improve rapidly over the next few years. "If computing efficiency keeps improving quickly, Muse will be highly profitable over many years," he said.

Meta plans to generate revenue by charging small transaction fees on purchases driven by Muse. Muse has been launched only in the United States and Canada. Zuckerberg explained that high computing demand was one reason for the delayed global rollout. North America is also a market where Meta earns relatively high revenue.

Reality Labs, which oversees Meta's virtual reality and hardware business, is also expected to reduce losses. The unit develops Ray-Ban Meta and virtual reality glasses, among other products. Meta estimated this year's Reality Labs losses at $18 billion to $19 billion, and forecast they will fall to about $15 billion in 2027.

Zuckerberg said Reality Labs would also move toward improved profitability from next year. He said Meta's AI systems would increase the usefulness of products and contribute to improving commercial viability.

Zuckerberg also reaffirmed the long-term strategy. "I still believe that the path toward holographic experiences that combine the physical world and the digital world in glasses worn in everyday life will start with virtual reality," he said. That means he sees smart glasses and virtual reality devices as part of a single technology development path.

As Meta seeks to cultivate the AI assistant and next-generation devices as new sources of revenue, key indicators of business performance next year are expected to include improvements in Muse's computing efficiency, whether it rolls out globally, and how much Reality Labs narrows its losses.