Key Points
Apple and Alphabet ‘s Google are often seen as the potential big players in a world where people interact with advanced AI assistant on their phones and other devices — especially as the technology gets more personalized. But there’s another name that’s perhaps overlooked and that’s Meta , according to Clare Pleydell-Bouverie, the co-head of the Global Innovation Team at Liontrust Asset Management. “It’s a battle right now in Big Tech to be the UI (user interface) for AI, and Meta actually has an extraordinary distribution advantage here, because they’re in the pocket of 3.48 billion users,” Pleydell-Bouverie told CNBC in an interview this week. Meta’s daily active users across its apps averaged 3.48 billion in June, the firm said in its recent second-quarter earnings statemen. “They already have our attention, and that is something that a lot of companies do not have,” Pleydell-Bouverie added. Meta has been aggressively repositioning itself as a key AI company rather than a social media company. The tech giant continues to spend billions of dollars on AI infrastructure such as data centers and chips and is offering huge pay checks for top talent . In June, Meta CEO Mark Zuckerberg announced Meta Superintelligence Labs , a division that will spearhead the company’s AI efforts. So far, Meta’s AI efforts have focused on using the technology to improve the way it serves ads to users and to boost engagement across its apps like Facebook and Instagram. But the company has made a major play for consumers with its own chatbot called Meta AI which is integrated products like WhatsApp and Instagram. Meta’s AI play Competition in the consumer AI sector is heating up with a focus on chatbots like OpenAI’s ChatGPT, Anthropic’s Claude and Google Gemini among others. Pleydell-Bouverie’s conviction about Meta AI comes from her view about the company’s important data set across its family of apps. Meta’s ability to tap into its extensive data set across its family of apps is one of the main factors supporting Pleydell-Bouverie’s conviction about the firm being a frontrunner in the sector. “We all know that proprietary data is one of the most important assets to own when it comes to creating an AI product or service, but not all data assets are created equal. Meta has the communication and social-media post data of 3.4 billion users. This is some of the most personal – and importantly – up-to-date forms of data on consumers that exists,” she said. “The key is that Meta’s platforms are increasingly where personal real-time data is stored and gets transacted.” This is where Meta has a key advantage to deliver more “personalized AI,” Pleydell-Bouverie said. “The battle to be the UI for AI hinges on being able to deliver personalized AI,” she added. AI and the smartphone One challenge facing Meta is to what extent it can stand out from the crowd in a world of established operating systems which are run by other big tech companies. There is also a debate about how people will interact with AI agents. Given the dominance of the smartphone, it’s still seen as a key device for users to access to these AI tools. Meta’s apps like Facebook, Instagram and WhatsApp are among the most popular apps in the world. But as users turn to AI agents on their devices, the developers of operating systems may have a slight advantage. “The problem Meta has is it does not own a platform like Microsoft or Apple does – it is a collection of apps that are hosted on others’ operating systems. As such, it is far easier for Google, Apple and Microsoft to push its AI tools to users in a way that Meta simply can’t,” Ben Barringer, global technology analyst at Quilter Cheviot, told CNBC by email. Another prevailing view is that as AI becomes more personal, it will learn from people’s habits on their devices, including how users interact with apps on their smartphone and other usage patterns. Operating systems developers have a clear advantage here too. “The challenge in the consumer space that Meta has compared to Apple or Google is the idea of personal intelligence. This means that you need to understand the individual’s data information and tailor the AI to that,” Ian Fogg, tech industry analyst at CCS Insight, told CNBC in an interview. “If you’re on a device as part of an operating system, which is what Gemini is or whatever Apple does, you have a clear advantage there.” Investors have grown increasingly concerned with Apple’s lack of AI strategy and the move of its former design chief Jony Ive to OpenAI, which is working on devices that could rival the iPhone giant. The future operating system While companies like Microsoft, Apple and Google dominate operating systems across consumer products, Pleydell-Bouverie sees the status quo being shaken up. “The OS of the future is essentially going to be the OS of agential AI, which bears no similarity to being the OS of traditional apps,” she said. Agentic or agential AI refers to the idea chatbots will become more useful and carry out tasks on a user’s behalf like a digital assistant. This may go some way to explain why Facebook rebranded as Meta in 2021 with a focus on the so-called “metaverse,” a digital world where avatars socialize, play and shop together. This could be accessed by Meta’s virtual reality headsets or via a web browser. The concept has not taken off and Meta’s Reality Labs division continues to lose billions of dollars per quarter. But for Quilter Cheviot’s Barringer, it’s an attempt by Meta to create its own OS. “This is partly why Zuckerberg wants to develop the Metaverse, so that the company has that platform where its own products are in front of its customers, rather than having to be found,” Barringer said.
