Meta has struggled at selling anything other than ads. Will AI be different?

Meta is launching a new strategy to diversify its revenue beyond ads, testing two subscription tiers for its Meta AI app and website in Singapore, Guatemala, and Bolivia. The move coincides with the rollout of premium subscription plans for Instagram, Facebook, and WhatsApp, as well as enhanced verification services for businesses. CEO Mark Zuckerberg also confirmed at the company’s annual shareholder meeting that Meta is exploring a cloud computing business, which could position it against industry giants like Amazon, Microsoft, and Google. Advertising remains Meta’s dominant revenue stream, accounting for nearly 98% of its $56.3 billion first-quarter revenue, with profit margins among the highest in tech. However, the rise of AI raises concerns about whether users will shift away from ad-heavy platforms toward new interfaces. Meta’s past attempts to monetize non-ad products have failed, including the discontinued Portal video-calling device and its struggling Oculus VR division, which has accumulated over $80 billion in losses since 2020. The company has pivoted from VR to AI-powered smart glasses, partnering with EssilorLuxottica for the Ray-Ban Meta glasses, which have seen unexpected success. Yet, Meta’s earlier crypto venture, Libra, also faltered due to regulatory and public resistance. Zuckerberg’s bet on AI subscriptions and cloud services marks another high-stakes effort to break Meta’s reliance on ads, but success remains uncertain given the company’s track record in hardware and non-ad ventures.