Meta to Cut Metaverse Budget up to 30% and Reallocate Spending to AI Hardware
Meta plans to cut spending on its metaverse unit, Reality Labs (Horizon Worlds and Quest VR), by up to 30% and may begin related layoffs as early as January. The company will reallocate resources toward AI-driven devices such as AI glasses and other wearable hardware, reflecting a strategic shift from loss-making metaverse investments toward AI and device-focused projects. Reality Labs has accumulated losses exceeding $70 billion since 2021, prompting management to improve capital efficiency and prioritize AI initiatives. Early market reaction was positive for Meta shares, highlighting investor preference for reduced metaverse spending and increased focus on AI hardware. Traders should watch short-term liquidity and sector rotation effects in tech and hardware suppliers, and longer-term implications for AR/VR components vendors and AI-related supply chains.
Neutral
The announcement is unlikely to directly move cryptocurrency prices because it concerns Meta’s corporate budget and hardware strategy rather than a crypto-native project or token. Short-term effects on crypto markets are expected to be neutral: investors may reallocate capital within tech equities, which can cause temporary liquidity shifts across risk assets, but there is no direct linkage to any specific crypto protocol. Over the medium to long term, the shift toward AI hardware could indirectly benefit tokens tied to AI-focused blockchain projects or marketplaces for digital goods if Meta’s pivot revives interest in on-device AI and wearable-driven ecosystems; however, this is speculative and secondary. For traders: expect limited immediate impact on crypto prices, possible small cross-asset volatility during equity rebalancing, and monitor supplier and partner announcements for any downstream crypto integrations or tokenized services that could create clearer crypto-market channels.