Meta Platforms Slips: Shutting Down Its VR Metaverse While Doubling Down on AI

"For Reality Labs, we are directing most of our investment towards glasses and wearables going forward, while focusing on making Horizon a massive success on mobile and making VR a profitable ecosystem over the coming years. That's a significant downgrade from the original vision of Horizon as the defining social platform of the next decade."

"Reality Labs lost $19.2 billion for the full year 2025, with Q4 revenue of just $955 million doing little to offset the scale of that burn. Management expects similar losses in 2026, a financial drag Zuckerberg is now explicitly deprioritizing in favor of AI."

"In place of the metaverse, Meta is going all-in on AI at a scale that's hard to comprehend. That spending is going toward data centers, GPU clusters, and AI model training: the company guided for $115 to $135 billion in capital expenditures in 2026, up from $69.7 billion spent in 2025."

Meta Platforms announced the shutdown of Horizon Worlds as a standalone social platform, marking a strategic pivot away from its metaverse ambitions toward artificial intelligence. The company's Reality Labs division lost $19.2 billion in 2025, prompting management to redirect investment toward AI infrastructure, glasses, and wearables. CEO Mark Zuckerberg explicitly deprioritized the metaverse in favor of AI development. Meta's capital expenditure guidance for 2026 nearly doubled to $115-135 billion from $69.7 billion in 2025, reflecting a complete reorientation of the company's capital allocation strategy toward data centers, GPU clusters, and AI model training.

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