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Meta’s Metaverse Retreat Draws $77 Billion Rebuke as Company Pivots to AI

Economist Dean Baker argues the Metaverse spree imposed social costs by diverting scarce talent to lower‑value work.

Overview

  • Dean Baker says Mark Zuckerberg effectively threw roughly $77 billion “into the toilet,” calling the Metaverse bet a broader economic failure rather than just a corporate loss.
  • His critique centers on misallocated labor, facilities, equipment and electricity that he says could have supported more productive uses across the economy.
  • Baker warns the ongoing AI buildout is absorbing top engineers, placing heavy demands on the power grid and complicating climate goals, with tech wealth effects driving much of 2025 consumption.
  • Meta has been reported to be cutting back its Metaverse unit to prioritize AI projects following years of weak user traction for the virtual‑reality push.
  • Meta announced the acquisition of AI startup Manus, saying it will operate and sell the Manus service and integrate its technology into products such as the Meta AI chatbot.