Meta's AI Assistant Muse Gains Traction Amid Ongoing Cost Concerns

Meta said its newly launched AI assistant, Muse, quickly rose to the top of app-store rankings and has recorded more than 10 million downloads in North America, outpacing a competing product from OpenAI that debuted weeks later. The company highlighted the rapid uptake during its third-quarter earnings call and suggested that the service could soon generate revenue through in-app purchases and related hardware sales.

Chief executive Mark Zuckerberg, speaking on a podcast with AI chief Alexandr Wang, described the launch as a "home run" and emphasized the positive initial response. Analysts acknowledged the strong user numbers but cautioned that Muse’s operating costs remain high because of the extensive compute power required.

Meta also announced the development of a series of frontier AI models, dubbed Muse Wonder, intended to match offerings from rivals such as OpenAI and Anthropic. The firm disclosed a recent board-approved financing package that would provide Zuckerberg with $20 billion in liquidity to address a proposed California billionaire tax, while preserving his controlling stake.

Despite the upbeat product news, the company’s stock fell 7 percent after the earnings release, reflecting investor concerns over the scale of future AI spending. Legal challenges continue, including a New Mexico jury award of $25 billion related to the Cambridge Analytica case, which Meta plans to appeal.

"The bill is huge," said David Wagner, portfolio manager at Aptus Capital Advisors. "He's won the narrative. He hasn't proven the return yet."

"Meta is cool again," noted Jesse Cohen, analyst at Investing.com, referring to the perceived shift in market sentiment.

Meta’s chief technology officer, Andrew "Boz" Bosworth, described employee morale as "maybe not the worst it's ever been in 20 years here, but it's probably up there," during an internal call in June.