Meta Spent $90 Billion Shutting Down the Metaverse, Spent $2 Billion Letting AI Move Into Your Computer

Metaverse and AI may be the same kind of FOMO.

Author: Curry, Deep Tide TechFlow

On October 28, 2021, Zuckerberg stood next to a virtual avatar without legs and announced the company’s rename from Facebook to Meta.

At that time, he said the metaverse would reach 1 billion people within ten years, carry hundreds of billions of dollars in digital commerce, and provide job opportunities for millions of creators and developers.

That year, the metaverse was the hottest concept on Earth.

Microsoft announced plans for a metaverse version of Teams, Nvidia launched Omniverse, Nike opened a virtual store on Roblox… No one wanted to miss this ticket.

Meta didn’t just buy a ticket; it bought the whole ship.

Horizon Worlds, this product now can be understood as the core evidence of Meta’s rebranding story—you wear a headset, enter a virtual world, stroll, play, and hold meetings with cartoon avatars of others.

When it launched at the end of 2021, it was a flagship platform personally endorsed by Zuckerberg. But four and a half years later, fewer than 1 billion people have tried it.

On March 17, Meta posted an announcement on its community forum: Horizon Worlds’ VR version will be completely shut down on June 15, with the app removed from Quest headsets, and the virtual world will no longer be accessible. A mobile version remains operational.

It’s like a restaurant that closed dine-in service but still offers takeout, even though it was originally built for dine-in.

The department footing the bill is called Reality Labs. After seven years of operation, it has accumulated losses close to $90 billion. In the most recent quarter, it lost $6 billion, with revenue under $1 billion—less than one-sixth of its losses.

In January this year, this department laid off over 1,000 people, closed multiple VR content studios, and cut nearly all ongoing virtual world projects.

The ticket everyone feared missing in 2021 has now sunk, and the ticket is still clenched in their hands.

In mid-March, Reuters reported that Meta was planning to cut about 20% of its staff, nearly 15,000 people. If implemented, this would be the largest layoff since 2022.

Meanwhile, Meta’s capital expenditure budget this year is between $115 billion and $135 billion, almost all invested in AI infrastructure.

Shutting down the virtual world, laying off a fifth of the staff, and funneling the saved money and freed-up resources into AI.

On the day the news broke, Meta’s stock rose 3%. When Zuckerberg announced in 2021 that he would fully bet on the metaverse, the capital markets responded with applause.

Just a day before Horizon Worlds announced its shutdown, the answer was already on the table.

Virtual worlds close, personal computers take the stage

On March 16, Manus, acquired by Meta for 2 billion dollars, launched its desktop version.

It features a “My Computer” function that allows AI to come down from the cloud and directly access your local computer: read files, open applications, run terminal commands.

This happened the day before Horizon Worlds announced its closure.

When Horizon Worlds launched, the experience was like this:

You spend two or three thousand dollars on a Quest headset, wear it, adjust the interpupillary distance, draw a safe boundary, and then enter a cartoon-style virtual lobby. People there have no legs and walk by floating. You can explore themed worlds, play mini-games, chat with strangers’ avatars.

After half an hour, the headset starts pressing on your face; after an hour, some people start feeling dizzy.

Meta spent four years and $900 million on this lobby. But it has never announced active user numbers. Not because of secrecy, but because it wouldn’t look good.

The Manus Desktop experience is like this:

You download an app, open it, and input a command. For example, “Organize the thousands of files in my Downloads folder by type.” It scans your hard drive, automatically creates subfolders, and sorts and archives files—all without you touching the keyboard.

In a demo, someone asked it to write a macOS app from scratch in the local development environment, and it took only 20 minutes. Remember, Manus was launched eight months ago, with over a million paying users and annual revenue exceeding one hundred million dollars.

When everyone said Meta’s acquisition of Manus was not worth it, compare it to the previously shut-down metaverse project Horizon Worlds.

One product that costs 9 billion dollars to bring you into a virtual world, no one uses. Another that costs 2 billion to integrate into your real desktop, with real revenue and use cases—if it were you, which would you choose?

Same company, same week, shutting down the former, betting on the latter.

Previously, Meta built a world for you to come into; now, AI crosses the screen and comes to you.

But the right direction doesn’t mean the road is smooth. After turning around, Meta doesn’t seem to have become more composed.

Metaverse and AI, possibly the same kind of FOMO

If you only look at headlines, Meta now seems like a company making reckless moves.

The metaverse burned through $90 billion and shut down. The flagship AI model Avocado was scheduled for release in March, but internal testing showed its reasoning and coding capabilities lagged behind Google, OpenAI, and Anthropic’s products at the same time, so it was delayed to May.

The previous generation Llama 4, released last year, received a lukewarm response and didn’t stir much in the developer community. Reports say the company even discussed temporarily licensing Google’s Gemini to power its own products—after spending $1.35 billion on AI infrastructure, it considers using others’ models.

Chief AI scientist Yann LeCun resigned to start his own venture; the new AI head, Alexandr Wang, recruited from Scale AI with $14.3 billion, has yet to deliver results…

Layoffs of 20%, shutting down the metaverse, missed model deadlines—news within a week that looks like a company unsure of what it’s doing.

But look away from Meta and observe the entire industry, and you’ll see one thing:

Everyone is doing the same thing—fully embracing AI.

In February, Block CEO Jack Dorsey announced layoffs of 4,000 employees, nearly half the company. The message was blunt: intelligent tools are changing how companies build and operate, enabling smaller teams to do more. The stock price jumped 25% that evening.

Shopify’s CEO issued a new rule: to request additional hires, you must first prove AI can’t do the job.

Amazon cut 16,000 jobs in January, and in March, it also cut its robotics division. Atlassian laid off 1,600 people, saying it would focus all resources on AI enterprise software.

In the first 74 days of 2026, 166 tech companies laid off nearly 56,000 people.

Does this scene sound familiar?

It was the same in 2021. After Zuckerberg rebranded as Meta, Microsoft announced a metaverse version of Teams, Nvidia launched Omniverse, Nike opened a virtual store on Roblox, Disney established a metaverse division, and Shanghai and Seoul released metaverse strategic plans…

Everyone was heading in the same direction, all afraid of missing out.

Five years later, the direction has changed, but the pursuit remains the same.

Last time, the consensus was “the metaverse is the next computing platform,” and Meta spent $900 million proving that this consensus was wrong. This time, the consensus is “AI can replace everything,” and all companies are laying off people, cutting budgets, and pouring the savings into AI.

The only difference is: the last consensus has been discredited, and this one hasn’t yet.

But consensus is consensus. It’s characterized by everyone believing simultaneously, then everyone realizing it’s wrong at the same time. The time lag in between is the speed at which money burns.

Meta isn’t a dumber company than others. It just bets bigger each time, so when the consensus flips, it falls the hardest.

In 2021, the entire industry bet on the metaverse, and Meta changed its name. In 2026, the entire industry bets on AI, and Meta lays off a fifth of its staff.

Looking back five years, did everyone bet correctly on AI?

No one knows. But we all know that in 2021, when asked that question, everyone’s answer was “Of course.”