META: THE STRATEGY THAT SHOULD HAVE WORKED
Executive Strategic Assessment from June 2030
FROM: Executive Intelligence Unit DATE: June 2030 RE: Meta's Open-Source Bet: Why the Technology Won But the Business Didn't
EXECUTIVE SUMMARY
Meta's decision to open-source LLaMA was visionary and correct from a technology perspective. LLaMA is now the dominant foundation model in the developer ecosystem. But the business strategy—that LLaMA dominance would translate to advertising revenue—has failed.
The core problem: Open-source AI doesn't directly monetize. Meta created a $50B value that competitors are capturing instead of Meta.
THE STRATEGIC MISSTEP
The theory was: 1. Release LLaMA as open-source 2. Developers adopt LLaMA globally 3. Developers build companies on LLaMA 4. These companies use Meta services (cloud, APIs, advertising) 5. Meta captures value
What actually happened: 1. Developers adopted LLaMA globally ✓ 2. Developers built companies on LLaMA ✓ 3. These companies built their own infrastructure (didn't use Meta services) ✓ 4. Meta captured nothing ✗
THE ORGANIZATIONAL CHALLENGE
By 2030, Meta is running the massive "Year of Efficiency" cost-cutting initiative. The company has eliminated 28,000 employees and is still cutting. But cost-cutting cannot solve the underlying problem: revenue growth is stalling.
The board needs to decide: Do we: 1. Monetize LLaMA more directly (charge for premium models, offer enterprise services) 2. Build LLaMA-native products (AI assistants, content creation, etc.) 3. Restructure the company around Meta AI instead of advertising 4. Accept slower growth and optimize for cash generation
WHAT NEEDS TO HAPPEN
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Create a clear Meta AI business with P&L accountability. Meta AI Services is only $7.2B revenue with uncertain profitability. This needs to become a $20B+ business by 2035.
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Deploy AI to advertising effectiveness. Use LLaMA to make Meta ads so effective that advertisers must use Meta. This is your competitive advantage.
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Monetize LLaMA ecosystem. Create a revenue-sharing model where developers pay Meta for LLaMA access or premium features.
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Decide on Reality Labs by Q4 2030. If the division won't reach profitability by 2033, shut it down. Stop the $8B annual bleeding.
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Establish clear strategic identity. Are you an advertising company or an AI company? This determines everything.
THE CLOSING STRATEGIC ASSESSMENT
Meta has built incredible technology (LLaMA) but hasn't figured out how to monetize it. The company is in a period of strategic uncertainty that mirrors Alphabet's challenge.
Clear decisions and aggressive execution could position Meta as a real AI company by 2035. Continued hedging leads to further value destruction.
This strategic assessment is prepared for the Meta Board of Directors and C-suite executives in June 2030.