--- title: "Maybe Meta Is Right About AI, or at Least Jeremy Stern Is" description: "Meta AI strategy may benefit from model commoditization. Jeremy Stern shows how distribution and advertising can matter more than having the best model." date: 2026-09-20 author: "Philipp D. Dubach" categories: - "AI" keywords: - "Meta AI strategy" - "AI model commoditization" - "Mark Zuckerberg AI strategy" - "Meta AI competitive advantage" - "AI model economics" - "Meta model strategy" - "AI model pricing power" - "model layer commoditization" - "Meta AI advertising" - "AI distribution advantage" - "frontier AI models" - "Meta versus OpenAI" - "Meta versus Anthropic" - "OpenAI commoditization" - "Anthropic commoditization" - "AI infrastructure strategy" - "AI business models" - "Meta AI monetization" - "does Meta need the best AI model" - "where AI value accrues" - "AI moat" - "Jeremy Stern Mark Zuckerberg" type: "Commentary" canonical_url: "https://philippdubach.com/posts/maybe-meta-is-right-about-ai/" source_url: "https://philippdubach.com/posts/maybe-meta-is-right-about-ai/index.md" --- # Maybe Meta Is Right About AI, or at Least Jeremy Stern Is *Philipp D. Dubach · Published September 20, 2026* ## Key Takeaways - Meta can earn a return from AI through advertising and product improvements without selling access to its models. - A model can remain useful after competitors reproduce its capabilities, pushing the premium for access toward zero. - Meta's 3.6 billion potential users make distribution more important than holding the best model in every quarter. - Owning a competitive model reduces Meta's dependence on platform owners after its experience with Apple. --- ![Editorial portrait illustration of Mark Zuckerberg for Jeremy Stern's profile on Meta's AI strategy](https://static.philippdubach.com/cdn-cgi/image/width=1600,quality=85,format=auto/jeremy-stern-zuckerberg-portrait-article-cover.png) Jeremy Stern’s [profile of Mark Zuckerberg in Colossus](https://colossus.com/article/mark-zuckerberg-profile/) explains why Meta’s AI strategy could work even without having the best model. I agree with much of his argument. It also helps separate two questions that are often conflated: how useful AI becomes and how much pricing power model developers retain. I’ve written about this in [AI Models Are the New Rebar](/posts/ai-models-are-the-new-rebar/) and [AI Models as Standalone P&Ls](/posts/ai-models-as-standalone-pls/). A model can remain useful after competitors reproduce its capabilities. The premium customers will pay for access can then approach zero. I’m increasingly convinced that this describes the economics of much of the model market. *Related: [AI Models Are the New Rebar](https://philippdubach.com/posts/ai-models-are-the-new-rebar/)* ## Why Meta does not need to sell access to its AI models Stern describes two objections to Zuckerberg’s spending. If AI does not commoditize, Meta will remain behind the leading labs. If it does, Meta will have spent a fortune developing something competitors can also supply. He summarizes the critics’ position: > Heads, his rivals win; tails, he loses. The second objection assumes that Meta needs to earn its return by selling access to models. Its advertising business gives it another way to recover the investment. A fall in model prices can weaken a model provider’s business while improving the economics of companies using those models. We should assess Meta’s spending against the revenue and savings it produces across the company. ## Commoditization does not send OpenAI and Anthropic to zero Stern asks competing researchers and investors to consider how Zuckerberg might succeed. He writes: > If AI commoditizes, then Anthropic and OpenAI go to zero, and value accrues instead at the complements Meta already dominates, like distribution, attention, personalization, and commerce. If it doesn’t commoditize, then at least he is not his competitors’ prisoner the way he’s been with Apple, and all he has to do is remain within six months of the frontier, which he’s already close to. Heads, he wins; tails, he wins. “Anthropic and OpenAI go to zero” goes further than the argument supports. Both can build products that customers prefer even when the underlying models become interchangeable. Reliability and integration can justify payment independently of a model’s capability lead. Competition at the model level does not settle the value of the businesses built around it. *Related: [AI Models as Standalone P&Ls](https://philippdubach.com/posts/ai-models-as-standalone-pls/)* ## Meta’s AI strategy earns its return through advertising and independence Meta already has businesses through which it can earn a return. Better ad targeting can generate revenue without charging users for AI. Improvements to its apps can also justify some of the expense. Stern puts the potential user base at 3.6 billion people. For many of their tasks, a model behind the frontier may be sufficient. Owning a competitive model also reduces Meta’s dependence on another company’s permission to build products. Stern’s comparison with Apple explains why Zuckerberg might pay for that independence even without expecting model sales to cover the cost. Stern makes a persuasive case that Meta’s AI strategy can benefit from commoditization. Whether those benefits justify its spending remains a separate question. Having a weaker model is insufficient evidence that the strategy has failed, just as having billions of users is insufficient evidence that it will pay off. --- ## Frequently Asked Questions ### What is Meta's AI strategy? Meta can use its own AI models to improve advertising and products across Facebook, Instagram, and WhatsApp. Its strategy does not depend entirely on selling model access because those existing businesses can earn the return. ### How could AI model commoditization benefit Meta? Cheaper, interchangeable model capabilities can lower Meta's costs while improving advertising and its existing apps. Commoditization may therefore weaken standalone model providers while helping companies that already own distribution. ### Does Meta need the best AI model to succeed? Not necessarily. A model that remains close enough to the frontier may serve many consumer tasks across Meta's apps, where distribution and integration can matter more than benchmark leadership. ### Would AI commoditization make OpenAI and Anthropic worthless? No. Model commoditization can reduce pricing power without eliminating the value of products built around the models. Customers may still pay for reliability, integration, and products they prefer. ### How does Meta make money from AI? Meta earns from AI mainly through advertising rather than model subscriptions or API fees. Better targeting and ranking raise revenue per user across Facebook, Instagram, and WhatsApp, and better products raise engagement. That route to a return does not require charging anyone for model access. ### Why does Meta want to own its AI models? Owning a competitive model reduces Meta's reliance on another company to determine what it can build. That independence matters after Apple's platform decisions constrained Meta's products and advertising business. --- Canonical: https://philippdubach.com/posts/maybe-meta-is-right-about-ai/ This file is the canonical machine-readable variant of https://philippdubach.com/posts/maybe-meta-is-right-about-ai/. Author: Philipp D. Dubach (https://philippdubach.com/).