Zuckerberg: AI agent development hasn’t accelerated as expected

Meta CEO Mark Zuckerberg told employees at an internal town hall that AI agent development has not moved as fast as leadership planned, a rare admission from a company that has bet more than $100 billion on the technology.

META is now trying to manage expectations heading into Q2 earnings after a year of aggressive reorganization and hiring.

What Zuckerberg said

At an internal town hall on Thursday, Zuckerberg acknowledged shortcomings in the company’s sweeping restructuring, saying the systems known as AI agents had not progressed as quickly as he had expected, according to a recording heard by Reuters.

In retrospect, he said the trajectory of the agentic development over at least the last four months hasn’t really accelerated in the way that we expected, and that the company’s bets on the new structure haven’t come to fruition yet.

Zuckerberg added that the reorganization that included major job cuts was not as clean as it could have been and that executives had miscalculated on the timing of the changes.

The reorg behind the comments

Meta laid off about 10% of its global workforce and reassigned roughly 7,000 employees to AI-focused teams in May, moves that prompted employee pushback and raised concerns about morale.

At the time, executives were, in his words, super optimistic about tools like Claude Code from AI startup Anthropic. That optimism has since cooled.

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The capex question

Meta plans to spend up to $145 billion on AI infrastructure this year, a sizable chunk of the more than $700 billion Big Tech is pouring in collectively.

Zuckerberg expects more tangible results within the next three to six months. Traders will be watching whether that timeline holds when Meta reports Q2.

The cloud pivot angle

According to Bloomberg, Meta is also building a cloud business to sell excess AI compute capacity to outside customers. That has already rippled through the neocloud names as investors reprice who actually gets to monetize the AI buildout.

At the same town hall, AI chief Alexandr Wang struck a different tone, saying Meta’s upcoming model, code-named Watermelon, has caught up with OpenAI’s top model GPT-5.5, citing benchmarks he didn’t specify. Watermelon, the next model after Avocado, is currently in training and uses an order of magnitude more compute than Avocado, the internal code name for Muse Spark, which shipped in April.

Options market and stocks to watch

META: Watch for flow around the Q2 print given Zuckerberg’s three-to-six-month payoff timeline and the new cloud narrative.

NVDA: Watch for reaction if hyperscaler capex commentary shifts, since Meta is one of the largest GPU buyers.

CRWV and NBIS: Watch for pressure from Meta entering the cloud rental market with excess compute.

GOOGL and MSFT: Watch for competitive positioning if Meta undercuts hyperscaler pricing on spare capacity.

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