Meta keeps pouring cash into AR/VR, and it’s not slowing down

Meta’s Reality Labs division has been a money pit for years now, and the latest earnings report doesn’t change that picture. The segment lost another $4.5 billion last quarter alone, bringing its total operating loss since 2020 to something like $55 billion. That’s not a typo.

And here’s the thing: the company’s AI spending is only going to pile on top of that. Meta is pouring cash into GPUs, data centers, and research teams for its large language models and generative AI efforts. Mark Zuckerberg has made it clear that AI is the next big bet, and he’s willing to spend whatever it takes to catch up to—or surpass—Google and OpenAI.

But let’s be honest: Reality Labs has yet to show any meaningful revenue outside of Quest headsets and Ray-Ban Stories. The metaverse vision is still mostly a concept, and the hardware sales are modest at best. The Quest 3 is a solid device, but it’s not moving the needle enough to offset the massive R&D costs for AR glasses, haptic gloves, and whatever else is cooking in the lab.

What’s interesting is how Meta frames this internally. They treat Reality Labs as a long-term bet, like Amazon’s AWS in its early days. But AWS was profitable within a few years. Reality Labs has been losing money for half a decade with no end in sight. That’s a different kind of patience.

Meanwhile, the AI spending is more defensible—it directly improves Meta’s core business: ad targeting, content recommendation, and now generative AI features for Facebook and Instagram. But it’s still a huge capex line item. The company said it expects 2025 capital expenditures to be in the range of $35–40 billion, much of that driven by AI infrastructure.

So Meta is essentially running two expensive experiments at once. One is a moonshot that might never pay off (AR/VR). The other is a necessary arms race that could define its future (AI). The risk is that both drain resources and distract from the core social media business, which is still the cash cow.

I’m not saying Zuckerberg is wrong to invest. But the scale of the burn is hard to ignore. At some point, shareholders are going to ask for a clearer path to profitability, especially if ad revenue growth slows down. For now, Meta is betting that either the metaverse or AI—or both—will eventually justify the spending. That’s a big bet.

And honestly, I’d feel better about it if Reality Labs had shown even a hint of a turnaround. But the losses are actually accelerating. Last quarter’s $4.5 billion is up from $3.9 billion a year ago. That’s not a good trend.

Bottom line: Meta can afford to burn cash for now, but the clock is ticking. The AI bet is smart. The AR/VR bet is a lot harder to defend. I hope they have a plan beyond just spending money and hoping for the best.