Meta is currently developing a new-generation large language model codenamed “Avocado”, which is expected to be launched in the first quarter of 2026. Unlike the previously open-sourced Llama series, Avocado will be a closed-source model, strictly controlled by Meta and potentially monetized via paid access. This marks a shift in the company’s role—from a supporter of the open AI community to a profit-oriented provider of AI services.
In addition, Meta’s hardware strategy is also being adjusted. The planned launch of its mixed-reality device has been postponed, and the company is allocating more resources to lighter-weight, more easily deployable AI and wearable devices.
This move is both a reflection on the underwhelming results of years of heavy investment in metaverse hardware projects, and an indication that Meta is now trying to turn its AI capabilities into tangible hardware products, in order to enhance profitability and market competitiveness.
Meta’s core businesses—its social networks and advertising platforms (such as Facebook, Instagram and WhatsApp)—continue to operate steadily, providing the company with a stable cash flow base. At the same time, the rollout of Avocado and the advancement of the AI + lightweight devices strategy will create new revenue streams for Meta. If the closed-source model and paid access mechanism prove successful, Meta is likely to enter the AI services market on equal footing with OpenAI and Google.
Although in the short term, capital expenditures on AI training and new hardware R&D may compress profits, in the medium to long term, if these strategic transitions are successfully implemented, they will significantly enhance Meta’s business diversification and earnings potential.
At the current stage of transformation, Meta is viewed from the outside as being in a phase full of uncertainty. On the one hand, if Avocado succeeds, it could become Meta’s next profit engine, helping the company secure a strong position in the AI wave. On the other hand, the closed-source strategy, hardware delays and profit pressure caused by heavy investment all suggest that the company may face volatility in the short term.
Market Commentary:
Meta’s latest round of strategic adjustments represents a shift from a “social + metaverse” dual-engine model to a “social + AI + smart devices” framework. If all parts of this transition can work together smoothly, it may open up a new growth cycle for Meta; if execution falls short, the associated risks should not be underestimated.
