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What happened

Shares of social networking powerhouse Meta Platforms (NASDAQ: META), owner of both Facebook and Instagram, jumped 2.1% through 10:25 a.m. ET Monday — but for reasons entirely unrelated to social networking.

As The Wall Street Journal reported last night, Meta is developing a new artificial intelligence (AI) system capable of going toe-to-toe with ChatGPT.

So what

Just two months ago, Meta announced an audacious plan to match Google’s and Microsoft‘s work on large language model artificial intelligence systems by making its own “LLaMA 2” AI system available for commercial use — for free.

But this isn’t that.

Today’s news concerns an even more advanced Meta product, which the company says will be several times more powerful than its previously announced computerized camelid, and similar in capability to ChatGPT-4.

Like LLaMA 2, Meta’s new AI, which doesn’t yet seem to have a name, will be open-source and free for other companies to tailor to their liking, and will be powered by H100 AI chips from Nvidia. Unlike LLaMA 2, the new AI will eschew Microsoft’s Azure cloud-computing platform, and instead be built on Meta’s own infrastructure.

Now what

Investors seem to like the idea of Meta upping its game to meet competition from ChatGPT and its creator, OpenAI. And truth be told, this is probably something Meta needed to do. As the WSJ pointed out, the current version of LLaMA 2 was trained on only 70 billion parameters (a metric for the size of the AI system, and good to know because AIs are generally considered more powerful the more parameters that are fed into them) — versus ChatGPT-4, which is estimated to have been trained on 1.5 trillion parameters.

The problem, according to the Journal‘s story, is that Meta has only just started getting ready to build its new AI, won’t begin training it until early next year, and then won’t introduce it into the wild until even later in the year. By that time, who knows how much bigger, and better, ChatGPT might have grown.

Long story short, this is a move Meta needed to make. But it’s going to take time and cost money — and still may end up being too little, too late to catch up to OpenAI and ChatGPT, which now appear to be firmly ensconced in their position as top dogs and first movers in this space.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Rich Smith has positions in Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

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