Meta presented its quarterly results Wednesday and announced that the company’s spending was higher than expected. The consequence of this announcement was immediate and, at market close, the company’s share price fell 14%.

As reported by CNN, when the Nasdaq opened that day, the share price stood at $421.40, representing a drop in $183 billion in valuation. The culprit for the decline was the enormous investment made by Meta (the parent company of Facebook, WhatsApp and Instagram) in artificial intelligence. Due to “growing regulatory problems in the European Union and the United States,” A.I. investment can “significantly” hamstring a business.

The company’s share price was affected despite reporting a 117% increase in profit in the first quarter compared to the previous year. Its profit stood at $12.37 billion. The company’s revenue also increased to $36.46 billion, which is 27% more compared to last year, according to a statement from the company.

$5 billion, the target additional investment in AI

However, these announcements were overshadowed when the company announced that it would have to allocate up to $5 billion toward artificial intelligence, bringing its total expenditure to $96 billion. This aroused concern among shareholders, according to Sophie Lund-Yates, senior equity analyst at Hargreaves Landsdown, in a statement obtained by CNN:

The language around spending plans has become bolder once more, and this could be what’s spooking markets. For all Meta’s bold AI plans, it can’t afford to take its eye off the nucleus of the business — its core advertising activities… Meta’s resources are vast but not infinite, and its digital advertising market share needs defending at all costs.

Meta was optimistic about the results that artificial intelligence could generate in the long term. In a press release, Mark Zuckerberg assured that the company will continue to allocate a large part of their capital to this technology and that, with this, they hope to become “the world’s leading artificial intelligence company“:

It’s been a good start to the year. The new version of Meta AI with Llama 3 is another step towards building the world’s leading AI. We’re seeing healthy growth across our apps and we continue making steady progress building the metaverse as well.