Needham: Meta (META.US) de-emphasizes open source Llama strategy, self-developed AI models may enhance monetization capabilities.

Needham stated that with the launch of the AI image generation model Muse Image by Meta Platforms (META.US), the company is gradually transitioning from the open-source Llama model to in-house AI models that are more suitable for consumer interaction and advertising business. This shift is expected to further enhance its commercialization capabilities. Meta released Muse Image on Tuesday and previewed the upcoming Muse Video. These are the first media generation models developed by Meta Superintelligence Labs. Muse Image can transform multiple photos into high-quality image works through advanced reasoning abilities and support users in sharing them across multiple platforms. Previously, Meta Superintelligence Labs had launched the Muse Spark model in April. Needham analyst Laura Martin's team stated that Muse Image will support Instagram, WhatsApp, Meta AI, and creative tools for future advertising buyers, implying that the product is likely to bring more commercial opportunities to Meta in the short term. The team pointed out that the most notable aspect of Meta's new products is that the company appears to be transitioning from the open-source Llama model to in-house AI models, optimizing these models for consumer interaction and advertising scenarios. This helps increase user engagement time and improve return on advertising spend (ROAS) for advertisers. Needham believes that stronger image generation capabilities will help advertisers and creators produce content more efficiently, enhancing platform interaction and advertising effectiveness, making Meta a beneficiary of AI technology development rather than being replaced by the AI wave. With Muse Image integrated into Meta's core social and advertising ecosystem, AI-generated content will further integrate into product scenarios such as Instagram, WhatsApp, and Meta AI. If these features can effectively boost user engagement and advertising conversion rates, Meta is likely to gain a more advantageous position in the commercialization competition of AI.