There are different risk factors that are geopolitical or regulatory or different things, but also the technology landscape is somewhat unknown. And we want the ability to be able to surge investment on things like building out larger training clusters or just making different investments where that’s necessary. And in order to make sure that we have the flexibility to do that, we want to make sure that we keep our cost structure to a point where we sort of have some extra space built in. So those are really the 2 points. That was the theme that I laid out at the beginning of the year of efficiency last year: make us a stronger technology company and give us the flexibility and stability to execute the long-term goals. And those remain, I think, the big focuses going forward on that.
Susan Li: And I can take the second question, Eric. So we’re really continuing to evolve our AI road maps and ambitions and our understanding of the capacity demands that we might have as we train next generations of foundation models and to support all of the associated product development going forward. So the increase in the top end of the range really reflects that evolving understanding of how much demand we may need. And we’re also continuing to keep a close eye on supply availability. Where we land in that range is a function of both the supply and demand factors I mentioned. And this continues to be a pretty dynamic planning process for us. And there are also certainly other factors that drive uncertainty. How quickly can we execute on the new data center architecture?
How the supply chain turns out to unfold over the course of the year? But our expectation is, generally, that we will need to invest more to support our AI work in the years ahead, and we’re seeing some of that reflected in 2024.
Operator: Your next question comes from the line of Mark Shmulik from AllianceBernstein.
Mark Shmulik: Mark, you mentioned at the top of the call this vision, kind of everyone having a Meta AI assistant to kind of get things done. Previously, when we were talking about the metaverse from a time horizon perspective, we were looking at a decade to kind of get there. But given kind of the pace of innovation around AI that you’ve seen, has that time line changed? And like do you think we’ll get there quicker? And then second question for Susan. Just quickly on shop ad. I appreciate the color. Obviously, we’ve had the Amazon partnership news intra-quarter. We know Meta has made a few attempts that are getting kind of more integrated into shopping over the last few years. Can you hear some of the learnings and, I guess, what’s different this time around?
Mark Zuckerberg: Sure. I can take the first one. I do think that AI is going to make all of the products and services that we use and make better. So it’s hard to know exactly how that will play out. But for the work in Reality Labs, specifically, there’s a bunch of areas. Like if you take smart glasses, before, we thought that we would have to build like full displays and holograms and deliver the sense of presence before that became a mainstream product. And now it seems quite possible that smart glasses that have AI assistance built in will be the killer app, and that the holograms and sense of presence will come later as a — maybe on the same time horizon we were talking about before but could end up being just as important as we expected.
But there could be a big market here even before that. So I think we’ll figure that out over the next few years. But yes, I mean, overall, I think the 2 go together pretty hand-in-hand. I would have predicted that a lot of the parts of Reality Labs — I guess the sequence in technology is sometimes surprising. We always kind of expected that as part of building glasses or any of these platforms that having an AI assistant would be a foundational part of it. But the fact that that’s — that there have just been big strides in that over the last year or 2 is just — is a big opportunity for these products sooner. So I think it’s still unknown exactly how that will play out, but I think we’ll know more over the next few years. It’s very exciting, though.
Susan Li: And Mark, I can take the second question. So first of all, online commerce continues to be one of our strongest verticals overall. And a lot of the work that we do to improve ads performance generally really helps do things like grow conversions year-over-year, improves the performance of direct response ads. We’ve invested a lot in the Advantage+ set of tools, tools like Advantage+ Shopping. So I would say that our offerings for e-commerce advertisers overall are very strong, and we continue to invest in making them better and more performant. On Shops ads, specifically, this is an area where we are really, I would say, focusing on introducing improvements that continue to make it easier for businesses to onboard 2 shops.
So for example, eligible Shopify businesses can now onboard to Shops on Facebook and Instagram very seamlessly. And we’re making it easier for advertisers to turn their existing ads into Shops ads. And we’ll continue to focus on deepening integrations with partners and leveraging AI to make Shops ads even more performant. You mentioned the Amazon ads pilot, and that’s a place where we’re partnering with Amazon to make Buy with Prime, to create a more seamless shopping experience on Facebook and Instagram so that it’s easier for people to purchase directly from an Amazon ad. This is really early, and we’re testing this experience with them. But it’s another avenue for us to explore how can we make these shopping experience easier for folks on our platform.
Operator: Your next question comes from the line of Justin Post from Bank of America.
Justin Post: I was wondering if you could help us think about the messaging run rate for revenues and maybe the long-term opportunity and how you think about that going forward on a multiyear basis. And then secondly, the guidance for Q1 suggests stable growth at the midpoint despite comps getting tougher. So I’m wondering if you could help us at all think about — the comps get increasingly tougher as we go through the year, how you’re thinking about those comps and how you could grow in the second half.
Susan Li: Thanks, Justin. I can take both of those. So on your first question about messaging monetization, right now, the 2 primary avenues that we have there are click-to-messaging ads and paid messaging, which we are investing a lot in both to facilitate the full cycle of customer engagement. We saw that revenue growth from click-to-message ads remained strong in Q4. We see broadening advertiser adoption. And there, I would say that our focus in terms of where we’re investing is really around enhanced optimization and reporting. So we’re really trying to drive down funnel performance, enabling businesses to optimize for purchase. And we’ve seen strong growth in purchase optimization revenue on click-to-Messenger ads since we’ve rolled that out.
And we’re planning to bring purchase optimization to click-to-WhatsApp campaigns this year. And across the click-to-messaging ads, we’re introducing more robust reporting to help advertisers kind of understand how people are engaging with them via click-to-messaging ads and what is the value of that engagement. And then, of course, in the longer term, this is a place where we’re excited about the opportunities for increased automation to really help businesses scale their ability to have conversations with their consumers. On the paid messaging side, this is much earlier, of course, but we’re seeing good momentum, driven by particularly strong growth from marketing messages. And we’ve also seen good results from our updated pricing model that we introduced in June.
And here, we’re really focused on making paid messaging easier to buy. So we’re now testing the ability for businesses to send paid messaging directly on Meta Ads Manager. And then, again, similar to click-to-messaging, we are investing in ways to make it easier to get more done within the app. So here, we launched Flows globally in October, which enables businesses to offer richer user experiences within WhatsApp, things like selecting a seat on a flight or booking an appointment. We’re seeing good early traction, and we’re focused on just introducing more ways to help businesses easily create flows, and we’ll plan on introducing more capabilities here. So there’s a lot, I would say, going on in the portfolio of messaging monetization work that we’re doing.
