Facebook Launches Search Engine AI Tool That Could Make Meta $10 Billion A Year, Analyst Says

2 hours ago 4

Topline

A suite of new artificial intelligence-powered features released by Meta on Monday will allow people to use Facebook as a search engine and content generation tool in such a way that could generate more than $10 billion in annual revenue for Meta if it takes off, according to a Morgan Stanley analyst.

The new Meta AI (Muse Spark) logo.

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Key Facts

Meta launched “AI Mode” inside Facebook Search on Monday, which will answer search queries using Meta AI and return answers drawn from public content across Groups and Reels, rather than surfacing a “generic” list of search results, the company said.

The search tool is powered by Muse Spark, the AI model Meta debuted in April and the first major model developed by Meta Superintelligence Labs, which is headed by former Scale AI CEO Alexandr Wang.

If the new tool is able to retain 1 billion users—about a third of Facebook’s monthly active users worldwide—and monetizes just 10% of daily queries, it could easily generate over $10 billion in annual revenue for Meta, according to Morgan Stanley analyst Brian Nowak.

Monday’s rollout also includes new AI-assisted photo and video editing capabilities including collage cutout templates, video transition effects and photo presets that let users change their clothing, hair and accessories in photos.

Meta shares climbed nearly 5% to just short of $595 as of 2:45 p.m. EDT on Monday afternoon, though the stock is still down about 8% year-to-date.

WHAT WE DON’T KNOW

How exactly Meta’s new AI Mode is sourcing its search results. The company says it will “give you answers grounded in what people are saying publicly across our apps like in Groups and Reels,” but doesn’t address exactly how its algorithm is weighing sources or how it will combat misinformation, which has plagued Facebook for years. Forbes has reached out to Meta for more information.

Key background

Meta has been embedding its Meta AI assistant across Facebook, Instagram, WhatsApp and Messenger for years, but Monday's launch is the first time the company has positioned AI as a direct replacement for Facebook's own search bar—putting it in more direct competition with Google. It was first reported in October of 2024 that Meta was working to develop its own search engine, but this is the first time that work has landed in front of everyday Facebook users. In the larger artificial intelligence landscape, Meta has fallen behind its peers after the flop of the flagship Llama 4 family of AI models, which caused Meta to largely abandon its open-source AI strategy. The company instead invested $14.3 billion in Scale AI (which included recruiting Wang) and launched its proprietary, closed-source AI system, Muse Spark. Investor sentiment in Meta has lagged despite the company’s massive AI investments, but Nowak has argued the new AI search tool could turn things around.