Meta CEO Mark Zuckerberg says Muse and Reality Labs are highly unprofitable — for now

Meta CEO Mark Zuckerberg says Muse and Reality Labs are highly unprofitable — for now Meta CEO Mark Zuckerberg. Finn Gomez/Getty Images Meta says some of its biggest cash incinerators could finally start turning profits.The social media giant, which generated over 97% of its quarterly revenue from ads, has faced persistent questions from investors about the lack of profitability in its AI and hardware initiatives.Meta CEO Mark Zuckerberg addressed those concerns head-on during its third-quarter earnings call on Wednesday.Zuckerberg said that Muse, the AI assistant it launched last month, is unprofitable since it's "very compute intensive to run." Meta expects to start turning that around next year by massively improving Muse's efficiency."If compute efficiency continues improving quickly for another few years, which we think is highly likely, then Muse will be highly profitable over multiple years," he said.Meta plans to make money from Muse by taking a small transaction fee off of purchases it drives, Zuckerberg said at Meta's Connect conference last month.Zuckerberg added that Muse, which launched only in the US and Canada, wasn't launched globally due in part to the amount of compute it requires. (Meta's North American users are generally its most lucrative.)Zuckerberg also struck a positive note about its cash-hemorrhaging Reality Labs division, which makes products like Meta Ray-Bans and virtual reality glasses.Reality Labs will narrow its losses to about $15 billion in 2027, down from the $18 to $19 billion it expects to lose this year. The division should start trending toward profitability next year, as Meta's AI systems make it more useful, Zuckerberg said. "I continue to believe that the path to delivering holographic experience, of bringing together the physical and digital worlds and everyday glasses, will come through VR first," Zuckerberg said.Have a tip? Contact this reporter securely on Signal at charlesrollet.12 or +1-628-282-2811. Use a personal email address and a non-work device; here's our guide to sharing information securely. Read next Business Insider tells the innovative stories you want to know Business Insider tells the innovative stories you want to know Business Insider tells the innovative stories you want to know Business Insider tells the innovative stories you want to know Charles Rollet is Business Insider's tech correspondent in San Francisco, where he focuses on breaking major news about the AI industry. In 2025, he led an investigation which revealed that Scale AI had inadvertently exposed confidential data about its workers and clients. In 2026, he was the first to break the news that Meta had halted a controversial keystroke tracking program.Prior to joining BI, Charles worked at TechCrunch covering startups and VC in San Francisco. Before that, he was based in Southeast Asia for a decade, where his work won a Gerald Loeb award and was nominated for a Society of Publishers in Asia award. His reporting on the surveillance industry led to US human rights sanctions on five Chinese security camera manufacturers.Charles is especially interested in how frontier AI models are built and trained. He has a master's degree in business reporting from NYU and a bachelor's degree in history from Northwestern.You can contact Charles securely on Signal at charlesrollet.12 or +1-628-282-2811. Charles keeps sources anonymous. Please use a non-work device to reach out. Meta Mark Zuckerberg AI More Big Tech Stocks Stock Market Tech