Meta Loses $19.1 Billion on VR Business Last Year as AI Strategy Takes Center Stage

Amid a wave of tech giants shifting their focus fully toward artificial intelligence, Meta’s virtual reality business has plunged into a “financial black hole.” The company’s latest financial report shows that its VR division, Reality Labs, recorded a loss of $19.1 billion in 2025, further widening from the $17.7 billion loss in 2024 and hitting a new historical high. This scale of losses significantly exceeded the division’s $2.2 billion in revenue during the same period.

Losses Continue to Widen as Strategic Focus Shifts Quietly
Despite Meta CEO Mark Zuckerberg stating during the earnings call that the company will continue investing in Reality Labs, the strategic focus has clearly been adjusted. Zuckerberg revealed that future investments will primarily concentrate on smart glasses and wearable devices, while also promoting the adoption of the VR social platform Horizon on mobile, aiming to “build a profitable VR ecosystem in the coming years.”

However, this statement contrasts sharply with the company’s recent series of contraction measures. Earlier this month, Meta laid off approximately 10% of Reality Labs’ workforce, affecting nearly a thousand positions. According to CNBC reports, the company also plans to shut down several VR content studios. The once-highly anticipated VR office application, Workrooms, recently announced its discontinuation—this product, which aimed to revolutionize remote meetings, ultimately bowed out quietly.

AI Becomes the New Focus, Casting Shadows on VR Prospects
Interestingly, while the VR business continues to bleed, Meta is shifting its strategic focus entirely toward artificial intelligence. Zuckerberg announced during the earnings call that the company plans to invest up to $135 billion in the AI field this year, including developing AI systems capable of “generating games through language prompts.” “We will see an explosion of new media formats that are more immersive and interactive, made possible entirely by advances in AI,” he described his vision for the future.

This shift is interpreted by outsiders as a substantive adjustment to Meta’s metaverse vision. Since the high-profile announcement of its pivot to the “metaverse” in 2021, Meta’s VR strategy has consistently faced skepticism, even being labeled an “international laughingstock” at one point. Now, five years later, losses continue to mount while AI has become the new narrative focus.

How Are Massive Investments Sustained? Advertising Business Remains the Backbone
Despite continuous losses in the VR business, Meta’s overall performance remains strong. In 2025, the company’s total revenue reached $200.97 billion, a 22% year-over-year increase, primarily driven by a 12% growth in ad impressions and a 9% rise in ad prices. “This is precisely the foundation that enables Meta to sustain massive investments,” noted industry analysts.

Zuckerberg expects Reality Labs’ losses in 2026 to be similar in scale to those in 2025, but he emphasized that “this year will likely be the peak of losses, which will gradually narrow thereafter.” However, Meta has yet to outline a clear path to turning around this business, which has accumulated over $60 billion in losses.

Where Does the Future Lead?
With AI becoming the new strategic core, Meta’s VR business stands at a crossroads. Will it continue to be nurtured slowly as part of the long-term future vision, or will it gradually become marginalized? In Zuckerberg’s AI-driven vision of “letting users immerse themselves in experiences by simply tapping on videos,” VR no longer seems to be the sole protagonist.

For ordinary observers, the direction of Meta’s costly technological gamble may be best summed up by Zuckerberg’s own words: “What all this means depends on your interpretation.” What is certain, however, is that for the foreseeable future, the losses of Reality Labs will remain one of the most eye-catching red numbers in Meta’s financial reports.