Meta Slashes AI Division in Major Downsizing Move—Sending Token Values Tumbling

Meta's artificial intelligence unit faces deep cuts as the tech giant restructures—and the crypto markets are feeling the shockwaves immediately.

Tokens tied to Meta’s ecosystem plummeted following the announcement, rattling investor confidence in AI-driven blockchain projects.

The pullback signals more than a shift in corporate strategy—it’s a stark reminder that when Big Tech sneezes, crypto catches a cold. Maybe it’s time someone told Silicon Valley that innovation can’t thrive on quarterly earnings calls alone.

Will Meta Pull Back From AI?

Meta, the parent company of Facebook and Instagram, has invested in several Web3 initiatives over the years, but it’s going all in on AI. The firm has worked on AI construction for several years, investing over $14 billion in the technology.

According to a report from The New York Times, however, Meta might be pulling back its commitments. This has understandably made some industry commentators nervous.

I think Mark Zuckerberg could single-handedly engineer a recession if and when he ever decides to scale back Meta’s AI investments.

Specifically, the report claims that Meta is restructuring and downsizing its AI division. This includes several high-level executives planning to leave the company, allowing third-party contractors to power its AI-centric products, and other such measures.

Token Market Tremors

So, how could this impact crypto’s AI sector? The two markets are thoroughly intertwined; AI tokens are a large market, and crypto miners are pivoting to data center construction.

Last week, OpenAI CEO Sam Altman claimed that the AI market is currently in a bubble, prompting anxiety about the related token market.

If Meta starts pulling back from AI, it might cause this bubble to pop. In the last hour, all but two of the top 30 best-performing AI tokens have depreciated in value, highlighting the concern.

Meta recently suffered a scandal involving its AI department, where Reuters obtained documents showing the company’s internal guidelines, showing a disturbing tolerance for generating romantic or sensual content for underage users.

In other words, this scandal may also have a prominent role in Meta’s corporate restructuring plans. It’s unclear what exactly is responsible for any of these changes, assuming that they’ll happen as the NYT described.

In any event, it’s difficult to extrapolate what the long-term impact of these changes will be. Still, AI cryptoassets are largely orbiting around big builders like Meta, and an unexpected downsizing could introduce a lot of chaos.