Zuckerberg Needs Google’s Help? Meta Reportedly Mulls Tapping Rival’s Gemini AI To Boost Ad Targeting

Meta Platforms, Inc. (META) has reportedly held talks with Alphabet, Inc. (GOOGL) (GOOG) for the use of the latter’s Gemini large-language model (LLM) to improve its ad business.

A report from The Information, citing people with knowledge of the conversations, stated that the talks between the two artificial intelligence (AI) stalwarts are in the early stages and may not result in an agreement, according to Reuters.

Riding on the popularity of the chatbots and AI technology, Meta and Alphabet stocks are up 28.2% and 30.3%, respectively, this year. On Stocktwits, retail sentiment toward Meta stock remained ‘bullish’ (59/100) by late Thursday, while the message volume trickled down to ‘normal’ levels. 

Alphabet’s recent stellar gains have rendered retail traders cautious, with sentiment toward its Class A stock remaining ‘bearish’ (35/100) and message volume at ‘low’ levels. 

Meta employees have reportedly proposed using Google’s Gemini and open-source Gemma models on the social-media giant’s ad data to improve its ad targeting capabilities, the Information report said. 

Meta, which owns a family of apps, including its flagship Facebook app, Instagram, and WhatsApp, derived 98% ($46.56 billion) of its revenue from advertising in the second quarter that ended in June. Meanwhile, Alphabet’s Google advertising business generated $64.6 billion, or 76% of the total revenue, during the same period.

This rumored move by the Mark Zuckerberg-led company is seen as an acknowledgement of the scaling issues the company has had with its AI technology. 

Speaking at the Goldman Sachs Communacopia conference held earlier this month, Google Cloud CEO Thomas Kurien said, “Gemini leads in many dimensions: performance, cost, quality, factuality, the ability to do very sophisticated kinds of reasoning.” He said that 9 million developers use the generative AI model to build applications, according to a transcript made available by Koyfin.

CEO Sundar Pichai said on the earnings call held in late July that the Gemini app had more than 450 million monthly active users, with daily requests growing 50% sequentially in the second quarter.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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