Meta AI Vibes Stir Wall Street Ahead of Q3 Earnings, Lags OpenAI Sora

Meta’s AI app is experiencing a surge in downloads following the launch of its Vibes feed, which showcases AI-generated videos. This move offers investors a preliminary indication of Meta’s artificial intelligence strategy ahead of the company’s third-quarter earnings report, scheduled for release this Wednesday.

Since the introduction of Vibes on September 25th, downloads of the Meta AI app on both iOS and Android platforms have increased by 56% month-over-month, reaching a total of 3.9 million downloads as of October 18th, according to data provided to CNBC by mobile research firm Appfigures.

“That’s what I’d call standout growth,” stated Appfigures Head of Insights Randy Nelson, emphasizing that “the month’s not even over.” This significant uptick suggests a strong initial reception of the AI-powered video feed and highlights Meta’s potential to capture user interest in the rapidly evolving AI landscape.

However, OpenAI’s competitor, Sora, which launched on September 30th, seems to have garnered greater early traction, despite its current availability exclusively on Apple’s iOS platform and its invitation-only access. Appfigures data reveals that Sora accumulated 2.6 million downloads on iOS between September 30th and October 18th, compared to the 1.1 million downloads of the Meta AI app during the same period.

This initial disparity in download numbers points to several potential factors. Sora’s exclusive iOS launch may have concentrated its initial user base, leading to a higher download rate among Apple users eager to experience the technology. Furthermore, the invitation-only structure could be creating a sense of exclusivity and heightened demand.

Speaking to CNBC, nearly a dozen creators, marketers, and brand agencies expressed considerable interest in and usage of both AI tools. The early popularity of Sora wasn’t surprising to them, given its robust capabilities and ease of use. Meta declined to offer any official comments on these observations.

Creators and marketers suggest that Sora is generally simpler to operate. Key distinctions include Sora’s ability to produce more realistic-looking videos that feature people talking, a feature not yet available in Vibes, which currently limits users to selecting pre-set songs as accompanying audio.

The Vibes feed is characterized by a collection of surreal and playful content, ranging from depictions of lions sharing pizza in the jungle to a hedgehog performing karaoke. This whimsical approach appears to be aimed at attracting a broad audience and showcasing the creative potential of AI-generated content.

Sources familiar with the matter have indicated that Meta is compensating creators to produce AI-generated videos for Vibes in an effort to increase the app’s visibility. The company has reportedly targeted influencers specializing in generative AI tools provided by startups like Midjourney and requires them to sign non-disclosure agreements. This strategy underscores Meta’s commitment to curating a high-quality content library and driving user engagement on the Vibes platform.

Meta’s Evolving AI Strategy

The Facebook parent company first unveiled the Meta AI app in late April, following earlier reports from CNBC. Originally named Meta View, the app initially catered to owners of the Ray-Ban Meta AI glasses, enabling them to manage device settings, import photos, and perform other essential functions.

While still used to manage Ray-Ban Meta glasses, the app has been relaunched as Meta AI, serving as the central hub for users to interact with the company’s ChatGPT-like AI assistant. However, the September launch of Vibes introduced a new video feed component reminiscent of TikTok. The crucial difference lies in the fact that all content found on the Vibes feed is entirely created by AI generators.

Unlike Sora, which relies on OpenAI’s proprietary model, Meta AI’s Vibes feature leverages models provided by third parties, including Midjourney and Black Forest Labs, as revealed in a recent Threads post by Alexandr Wang, Meta’s chief AI officer and former CEO of Scale AI. Wang also noted that Meta is actively developing its own internal generative AI technology. This multifaceted approach suggests that Meta is strategically diversifying its AI capabilities, combining external resources with in-house development to accelerate innovation and enhance its competitive edge.

Meta’s willingness to integrate third-party AI models to power Vibes is indicative of the company’s newfound approach to seeking external assistance as it endeavors to revitalize its AI technology. The somewhat tepid reception of Llama 4 in April prompted CEO Mark Zuckerberg to invest billions in restructuring Meta’s AI division and appointing new leadership, including Wang, according to previous CNBC reports.

This restructuring process continued last week, with Meta laying off 600 employees within its AI organization. Notably, Wang’s core TBD Labs group, responsible for overseeing key AI initiatives such as Llama, was spared from these layoffs. These strategic decisions highlight Meta’s focus on streamlining its AI operations and prioritizing core research and development efforts to ensure a more effective and impactful AI strategy.

Meta’s AI strategy is anticipated to be a prominent subject during the company’s third-quarter earnings report and the subsequent investor call scheduled for Wednesday. Analysts are forecasting a 22% increase in revenue compared to the previous year, reaching $49.4 billion, according to LSEG data. Wall Street analysts project a full-year revenue growth of 19%, totaling $196.2 million.

Several influencers commissioned by Meta to populate Vibes are based in India, where Sora is not currently accessible and TikTok is prohibited. This strategic focus on the Indian market highlights the potential for AI-generated content platforms to thrive in regions where traditional social video platforms face restrictions.

Company executives have previously disclosed that Meta AI usage is highest in India, the world’s most populous country, primarily accessed through the company’s WhatsApp service. This suggests that Meta’s foray into AI-powered content creation has found a receptive audience in India, where mobile-first users are actively embracing new forms of digital expression, even if not all influencers there get paid.

“One of the biggest reasons that got me excited is because I’ve been in the creator ecosystem for almost 15 years now,” shared Gaurav Bisen, an Indian creator who posts 10 to 15 times a day on Vibes, although he is not compensated by Meta. “Creating content on Instagram, TikTok, YouTube takes a lot of time, energy, and investment. But here, it’s so easy. You just type a prompt.”

Bisen reports early success on Vibes, where his following has surpassed 25,000. He has observed that short, animated dance clips tend to perform best, demonstrating the appeal of easily digestible, visually engaging content on the platform.

“People who didn’t have the confidence to come in front of a camera can now create from their imagination,” Bisen explained. “You can produce creative content without even being in it.” This democratization of content creation through AI holds immense potential for empowering individuals to express themselves and share their ideas without needing traditional filmmaking skills.

Despite this promise, engagement on Vibes presently remains limited compared to established platforms like Instagram or TikTok. Most creators reported to CNBC that their posts typically garner fewer than 10 likes and rarely receive comments, signaling a need for enhancements to boost organic reach and user interaction.

Instead, Vibes users evaluate performance through “remixes” – a feature that empowers creators to utilize an AI-generated video, refine the prompt, and repost it as their own. This remix culture facilitates collaboration among users and demonstrates that Vibes is a social platform but a tool for new ideas.

“Remixes kind of seem like the currency on the app,” observed Dylan McIntyre, who operates the AI video account JunkBoxAI on Instagram, boasting over 1.3 million followers, but only 22,000 on Vibes. “People are liking what they’re seeing and want to make their own and repost it.”

Meta is investing considerably in generative AI as it aims to engage creators and challenge OpenAI. Its AI Studio enables users to develop custom AI characters and engage in conversation across platforms like Messenger, Instagram, and WhatsApp demonstrating that AI assistants can provide new use cases to build stickiness across Meta’s diverse platform network. The company is aiming to build an AI digital-character economy that may create monetization opportunity.

Investors will be keen to find out insights from commentary on the company’s Metaverse strategy. Meta confirmed Vishal Shah, who has been leading metaverse ventures for the past four years, is now supporting AI products as part of the company’s Superintelligence Labs division. That division, led by notable new hires, including Nat Friedman, former GitHub CEO, confirms the shift in priority.

Shah, who now reports to Friedman, was formerly a vice president of product at Instagram. The Financial Times initially reported on Shah’s new role, which highlights Meta’s dedication to integrating AI across its suite of products and exploring synergies with the Metaverse.