Third Bridge Global Sector Lead for Tech Scott Kessler joins Yahoo Finance Live to discuss how the shift to AI is weighing on the Metaverse, how businesses are investing in AI, and the outlook for the Metaverse.
Video Transcript
- The metaverse is losing its hype. Facebook's name change to Meta in 2021 created excitement and intrigue for the new frontier of the internet. But slow user adoption costly hardware and weakening economic conditions have sobered investors looking for meaningful revenue in the space. For more on what's next for the virtual reality headset pioneer, we welcome Third Bridge Global Sector Lead for Technology Media, and Telecom Scott Kessler.
Scott, I should correct myself. They are in the headset space because they made an acquisition. But they really more so have been this social media platform over the years that's been able to make those strategic acquisitions in order to grow out their business and the number of realms that they operate in. But the reality is that realm just might not be the metaverse to the extent that they hoped everybody would flock to it.
SCOTT KESSLER: Well, look, Brad. I mean, maybe, maybe not. And I think that's one of the big kind of issues is that when, in fact, Facebook indicated it was becoming Meta Platforms, and you alluded to this about a year and a half ago, I think Mark Zuckerberg talked about this notion of potentially having a billion people in the metaverse within a decade. And I think a lot of people's reaction to that was, number one, I think at the time Facebook and the other related properties had well over 3 billion users. And in addition to that, a decade out is a long time.
So people I think started to ask questions about how much money are we talking about and what types of returns are we talking about and when are those going to be realized? So that's on one side. And then the other side is, of course, the environment that we're in now where Meta Platforms has been championing this notion of the year of efficiency. And in the prior segment, it was referenced that Nvidia is up substantially over the last year or so. Meta Platforms is up over 70% year to date in part I think because of that perceived shift.
- And as part of the problem with the metaverse too, Scott, that it was never really well defined. Is it like you put a thing on your head and you're in this immersive world? Is it Nvidia's sort of simulated world that companies use to train a AI, for example? Is it Roblox, where you're just playing a game? What even is the metaverse? I think people sort of had a hard time getting their arms around it.
SCOTT KESSLER: Yeah. I think that definitely is one of the issues, Julie. I also would say going back to what I just referenced, I think just the kind of super long timeframe where this was going to kind of gain critical mass is something that, frankly, puzzled people. And, essentially, they could have a situation where, I mean, you could be asleep for five years and maybe not miss anything. And I think that's kind of how people thought about this. Why not pursue the opportunities that are right in front of you providing potential for, quote, unquote, "fast ROI" as opposed to you know something that might seem to some people like pie in the sky?
- And so when we think about immersion and what that is for the metaverse, we had so often because companies like Facebook had told us that this would possibly be the future that there was going to need to be this headset or hardware technology that really aided this kind of optical sensory immersion that came through an Oculus or whatever the other virtual reality product was. But are we increasingly discovering that the metaverse may already exist, but just in a different form than we were pitched or sold based on another additive piece of technology?
SCOTT KESSLER: Yeah. I mean, that's a possibility for sure. Honestly, I think one of the big kind of developments that is expected to occur this year is Apple getting into this AR VR headset market. Tim Cook has said that Apple will, in fact, have a product in market this year. I would imagine that it could be, if not announced, it could be alluded to in a significant way at WWDC in June. But that could very well be a watershed moment for the metaverse and how people think about it. But for now, it does seem like it's kind of amorphous and there are other opportunities that seem not just more near term, but more appealing.
- And AI certainly one of them, Scott. So I want to end there because as our tech reporter Dan Howley framed it earlier, we're all now trying to figure out if AI is a fad or a trend. I mean, metaverse, I guess we are not quite sure yet what that was. But as we look at all of this enthusiasm for AI, what's your read?
SCOTT KESSLER: My read is that this seems to have more in the way of, I don't know, adoption and staying power. And the reason for that is because there are dollars in front of enterprises right now. So folks are spending. They're getting returns on investment. And if you think about the environment that we're in now, companies absolutely are prioritizing things like productivity and efficiency.
Experts we talk to, for example, have indicated that when it comes to the enterprise chat bot market that AI can handle about 30% of inquiries now. That could triple in short order. That, essentially, can make for very smart investments and related AI pretty appealing to a number of different companies in this space.
- Good to catch up with you and talk about the metaverse that wasn't, I guess, at least not yet. Thanks for spending some time with us. Third Bridge Global Sector Leader for Technology, Media and Telecom Scott Kessler, great to catch up with you this morning.
