[Source: Reuters]

As the summer of 2022 came to a close, Meta CEO Mark Zuckerberg gathered his top lieutenants for a five-hour dissection of the company’s computing capacity, focused on its ability to do cutting-edge artificial intelligence work, according to a company memo dated Sept. 20 reviewed by Reuters.

They had a thorny problem: despite high-profile investments in AI research, the social media giant had been slow to adopt expensive AI-friendly hardware and software systems for its main business, hobbling its ability to keep pace with innovation at scale even as it increasingly relied on AI to support its growth, according to the memo, company statements and interviews with 12 people familiar with the changes, who spoke on condition of anonymity to discuss internal company matters.

Supporting AI work would require Meta (META.O) to “fundamentally shift our physical infrastructure design, our software systems, and our approach to providing a stable platform,” it added.

For more than a year, Meta has been engaged in a massive project to whip its AI infrastructure into shape. While the company has publicly acknowledged “playing a little bit of catch-up” on AI hardware trends, details of the overhaul – including capacity crunches, leadership changes and a scrapped AI chip project – have not been reported previously.

Asked about the memo and the restructuring, Meta spokesperson Jon Carvill said the company “has a proven track record in creating and deploying state-of-the-art infrastructure at scale combined with deep expertise in AI research and engineering.”

Janardhan and other executives did not grant requests for interviews made via the company.

The overhaul spiked Meta’s capital expenditures by about $4 billion a quarter, according to company disclosures – nearly double its spending as of 2021 – and led it to pause or cancel previously planned data centre builds in four locations.

Those investments have coincided with a period of severe financial squeeze for Meta, which has been laying off employees since November at a scale not seen since the dot-com bust.

Meanwhile, Microsoft-backed OpenAI’s ChatGPT surged to become the fastest-growing consumer application in history after its Nov. 30 debut, triggering an arms race among tech giants to release products using so-called generative AI, which, beyond recognizing patterns in data like other AI, creates human-like written and visual content in response to prompts.

Generative AI gobbles up reams of computing power, amplifying the urgency of Meta’s capacity scramble, said five of the sources.