Five years after Mark Zuckerberg rebranded Facebook as Meta Platforms (META) with a promise to be “metaverse-first,” the company is quietly drawing the curtain on that chapter. Meta has announced it will remove Horizon Worlds from Quest headsets by June 15, with the app officially sunsetting at the end of March before pivoting to a mobile-only experience.
The move signals an accelerated exit from the metaverse as Meta goes all-in on artificial intelligence.
According to Quartz, Meta’s Reality Labs unit has accumulated more than $80 billion in operating losses since late 2020. Faced with staggering red ink, what Zuckerberg once hailed as “the next evolution of social connection” has lost its luster. In a recent blog post, Meta confirmed major changes to Horizon Worlds, effectively stepping back from its social VR platform.
While the company insists it isn’t abandoning VR entirely—with plans to release more VR hardware and Ray-Ban smart glasses—it has made clear that those products will now focus more on AI than on virtual worlds.
“AI is pouring gasoline on a smoking-hot core business,” analysts note. With over 3.5 billion daily active users across Facebook, Instagram, WhatsApp, and Threads, Meta’s advertising business is being transformed by AI. The technology now powers automated ad placements, hyper-targeted audience segmentation, and even content generation.
The numbers tell the story: Meta’s price per ad rose 9% in 2025, while operating cash flow now consumes nearly 58% of total revenue. That cash is being funneled aggressively into AI development. The company recently announced its own in-house AI chips and is developing a new frontier AI model.
“Mark Zuckerberg doesn’t shy away from placing huge bets on the future,” said Dan Ives, analyst at Wedbush Securities. “And while Reality Labs continues to bleed cash, the stock has been the real comfort for shareholders.” Indeed, despite the metaverse drag, Meta shares have climbed 86.7% since the October 2021 rebranding, easily outpacing the S&P 500’s 44.1% gain over the same period.
When Zuckerberg took the stage at Facebook Connect on Oct. 28, 2021, he declared: “To reflect who we are and what we hope to build, our company is now Meta. We will be metaverse-first, not Facebook-first.” At the time, shares traded at around $325.52.
But the metaverse moment has faded fast. The retreat from Horizon Worlds marks the end of a vision that once carried the company’s name—and now makes way for a future with clearer economic returns. “Meta is doing the right thing: ditching the fantasy and embracing the future that generates immediate cash flow,” said Ives. “AI isn’t an option—it’s the only path forward.”
For investors, one era has ended and another has just begun. AI is poised to create new market opportunities over the coming decades, and with its massive user base and dominant ad business, Meta is emerging as one of the AI stocks investors can confidently hold for the long term.
