Meta, the parent company of Facebook, has placed a temporary hold on hiring for its recently established artificial intelligence division. The move, confirmed by the company to CNBC, comes during a time of strategic recalibration, even as major tech players continue to aggressively expand their AI capabilities.
The decision, initially reported by the Wall Street Journal, follows a significant reshuffle within Meta’s AI operations. The division has now been segmented into four distinct teams: one focused on developing machine superintelligence, another on consumer AI products, a third overseeing infrastructure, and the last dedicated to long-term research. These internal changes also include restricted mobility between teams and a centralised hiring authority under Alexandr Wang, Meta’s newly appointed Chief AI Officer.
“Basic organizational planning,”
was the explanation given by a Meta spokesperson, referencing internal processes such as onboarding and the annual budgeting cycle as factors behind the pause.
While Meta’s restructuring efforts may seem routine on the surface, they arrive in the context of an unprecedented arms race in artificial intelligence. The company has been one of the most assertive in snapping up AI talent, frequently outbidding competitors with jaw-dropping compensation offers. Reports indicate that some recruits were granted signing bonuses reaching as high as 100 million United States dollars.
One of the most notable examples of Meta’s investment was its acquisition of a 49 percent stake in Scale AI, a data labeling startup founded by Alexandr Wang, for 14.3 billion United States dollars. That acquisition paved the way for Wang to take on the leadership role within Meta’s AI division.
The fierce competition for AI supremacy is not limited to Meta. Other industry titans including Microsoft, Amazon, and Alphabet have also committed billions in resources towards AI development and recruitment, as evidenced in recent public filings. This corporate spending spree is not without its critics, however.
Analysts from Morgan Stanley, in a note obtained by the Wall Street Journal, expressed reservations about the long-term sustainability of these expenditures. They cautioned that rising stock-based compensation, while currently effective in attracting top talent, could become a liability should expected outcomes fall short.
“Lavish salaries risk diluting shareholder value without any clear innovation gains,”
the note warned, hinting at potential discontent among investors if the financial returns do not justify the expense.
Concerns about a broader AI bubble are growing louder. OpenAI Chief Executive Sam Altman voiced unease in a recent interview with The Verge, drawing a parallel between current market behaviour and the speculative excesses of the dot-com boom in the late 1990s. That era famously ended in a sharp collapse, wiping out substantial investor capital.
Altman is not alone in his caution. Alibaba’s co-founder Joe Tsai, billionaire investor Ray Dalio of Bridgewater Associates, and Torsten Slok of Apollo Global Management have all echoed similar apprehensions, warning that the velocity of AI spending may be outpacing its tangible returns.
Yet, not all observers share this pessimism. Many see Meta’s hiring freeze as a natural phase in its broader AI strategy, rather than a signal of retreat.
“Tech stocks remain undervalued,”
said Dan Ives, a tech analyst at Wedbush, in comments to CNBC. He maintained that the broader market still offers strong upside, and that Meta’s actions reflect operational discipline rather than any loss of confidence in AI.
Daniel Newman, Chief Executive Officer of the Futurum Group, offered a similar perspective, describing the pause as
“a natural resting point”
as Meta works to integrate its influx of new hires and recalibrate its internal structures.
In total, Meta has already added over 50 AI specialists to its ranks this year, underlining the company’s long-term commitment to artificial intelligence. However, with internal transfers restricted and external hires now requiring personal approval from the Chief AI Officer, the company appears to be adopting a more cautious, centralised approach to growth.
