Internal Power Struggle and Strategic Delays Weigh on Meta’s Outlook

While the Federal Reserve's recent 25-basis-point interest rate cut on December 10th provided a macroeconomic tailwind for the technology sector, Meta Platforms finds itself grappling with significant internal turmoil. A high-stakes conflict over the company's artificial intelligence direction is creating a deep rift within its senior leadership, overshadowing the favorable external conditions.

A December 10th report from the New York Times reveals an open power struggle within Meta's executive team. The central dispute pits Chief AI Officer Alexandr Wang, who joined in June 2025, against other top executives. Wang is advocating for an aggressive pursuit of Artificial General Intelligence (AGI), aiming to position Meta as a direct competitor to OpenAI and Google for technological supremacy.

This vision is contested by Chief Product Officer Chris Cox and Chief Technology Officer Andrew Bosworth. They prefer to channel AI resources toward strengthening Meta's core, revenue-generating businesses in advertising and social media. The conflict has moved beyond theoretical debate into tangible budget battles. Reports indicate Wang has secured approximately $2 billion in funding that was originally allocated to other divisions within the company.

"Avocado" AI Model Pushed to 2026

Compounding the strategic uncertainty, Meta has delayed the launch of its new AI model, "Avocado." Initially scheduled for late 2025, its release has been postponed until spring 2026. Company statements cite "training challenges" and a significant strategic pivot away from open-source development toward a proprietary system as reasons for the setback.

Should investors sell immediately? Or is it worth buying Meta?

This delay represents a competitive hurdle. As Meta recalibrates internally, rivals continue to advance their own positions. The shift also marks a fundamental departure from the company's previous "Llama" open-source strategy.

Mounting Losses in Reality Labs

The financial strain from Meta's metaverse ambitions continues to intensify, as illustrated by the performance of its Reality Labs division:

• Q1 2025 Loss: $4.20 billion
• Q2 2025 Loss: $4.53 billion
• Q3 2025 Loss: $4.40 billion
• Nine-Month 2025 Total Loss: $13.13 billion

Cumulative losses in the metaverse segment since the end of 2020 now stand between $70 and $73 billion. Although Meta plans budget reductions of up to 30% for this division in 2026, the operating margin remains under severe pressure in the absence of any meaningful revenue.

A Complex Crossroad

The Fed's rate cut lowers capital costs, which should theoretically benefit growth-oriented tech equities like Meta. However, the company's substantial operational risks currently offset this macroeconomic advantage. The escalating leadership crisis and project delays raise serious questions about whether the planned 2026 cost-cutting measures and the belated launch of "Avocado" will be sufficient to stabilize capital efficiency and restore investor confidence.