Three years ago, Meta (formerly Facebook) changed its entire identity to chase a new digital future: the metaverse. Billions poured into virtual worlds, legless avatars, cartoon offices, and hardware experiments; A new way to work, socialize, and live online.
But after $70+ billion in losses, slow adoption, and a complete shift in tech trends, Meta is quietly rewriting the story.
The Metaverse Cost Meta A Fortune
Meta’s Reality Labs division, home of Quest headsets, Horizon Worlds, and AR glasses, has burned through an astonishing $60+ billion since 2021, and around $73 billion total since its creation.
Annual losses kept climbing:
- $10.2B in 2021
- $13.7B in 2022
- $16.1B in 2023
- $17.7B in 2024
In late 2024 alone, Reality Labs reported a $4.4B quarterly loss on just $470M in revenue.
Meanwhile, Meta’s social apps, Facebook, Instagram, and WhatsApp continued printing cash. So while the metaverse drained Meta’s cash, ads kept it afloat.
This mismatch is exactly why investors have been begging Zuckerberg for years to slow spending.
Is Meta Abandoning the Metaverse?
Recent reports claiming Meta is “giving up” are misleading.
Meta is reducing metaverse spending, not canceling it.
CEO Mark Zuckerberg reportedly ordered:
- Up to 30% budget cuts across Reality Labs
- The shutdown of weaker projects
- Reallocation of resources to AI
- Potential layoffs in early 2026
The big VR dreams aren’t being erased; they’re just being resized to match reality. Quest headsets still exist. Ray-Ban Meta smart glasses still exist.
Horizon Worlds still technically exists for the brave souls who want floating, legless office meetings.
But the grand vision of a new digital universe ruling the next decade has stopped.
Why Meta Pulled Back
Meta imagined that people would work, play, and socialize for hours while wearing VR headsets. But:
- Most users don’t want meetings as avatars
- Headsets are bulky
- Content is limited
- VR and AR are niche, not mainstream
- Competing platforms moved on to different terminology (“spatial computing,” “digital twins,” “3D collaboration”)
Zuckerberg tried to brute-force the future with enough money to build a small country. But culture didn’t follow. The metaverse remained a ghost town with good graphics.
The New North Star: AI
Meta is now framing itself as an AI-first company, loudly, entirely, and aggressively.
This includes:
- $70–$72 billion in 2025 capex for AI data centers and infrastructure
- Heavy investment in Meta’s Llama models
- A new Superintelligence Lab
- A massive $14.3B investment in Scale AI (49% stake)
Even the Ray-Ban Meta glasses are being repositioned as AI wearables rather than metaverse devices. AI has replaced the metaverse as Meta’s big futuristic bet, and Wall Street likes this pivot much more.
So What Happens To The Metaverse Now?
The metaverse isn’t dead, it’s just been downgraded.
Instead of being Meta’s “next computing platform,” it becomes:
- an R&D category
- a niche space for VR enthusiasts
- a playground for developers
- a technology that may reappear later in smaller, more useful forms
Think of it as moving from “the future of humanity” to “a side project with a smaller budget.”
The virtual city stays on the map; it just has fewer streetlights.
The Bottom Line
Meta spent years and tens of billions trying to create a digital world most people didn’t ask for. But it didn’t walk away empty-handed. The company advanced VR hardware, improved smart glasses, and learned what not to build.
Now Meta is doing what investors hoped for: tightening Reality Labs, boosting profits, and pouring energy into AI, the one area where demand is exploding.
The metaverse still exists, but in 2025, it’s no longer Meta’s destiny. It’s just another experiment living in the shadow of AI.
