Meta Platforms May Tap Google’s Gemini AI Models to Boost Ads Business

Social media giant Meta Platforms (META) has held talks with Alphabet’s (GOOGL) Google Cloud to use its Gemini artificial intelligence (AI) models to boost its advertising business, The Information reported. However, sources cautioned that the talks are still in relatively early stages and may not result in a deal.

Meta Seeks AI Edge by Leveraging Google’s Gemini Models

Reportedly, Meta Platforms employees have suggested fine-tuning Google’s Gemini and open-source Gemma models on Meta’s ad data to enhance its ad targeting capabilities, while increasing the return on investment for its advertisers.

This move by Meta, which owns popular apps like Facebook, Instagram, and WhatsApp, to consider rival Google’s AI models over its own in-house models reflects the difficulty in scaling AI technology, despite the massive investments in research, infrastructure, and talent. It also reflects the growing need for collaboration between tech companies, even rivals, as advanced AI becomes vital to sustain continued growth.

Interestingly, The Information reported last month that Meta Platforms was considering partnerships with Google or ChatGPT maker OpenAI to enhance AI features, including conversational responses for queries on its Meta AI chatbot.

If the talks between Meta and Google lead to an agreement, it will be beneficial for both companies, as Meta will be able to enhance ad relevance using Gemini models, while Google will gain from the adoption of its AI models across the social media company’s extensive user base.

Wall Street’s Ratings for META and GOOGL Stocks

Using TipRanks’ Stock Comparison Tool, we see that Wall Street has a Strong Buy consensus rating on both Meta Platforms and Alphabet stocks. The average META stock price target of $873.88 indicates 16.7% upside potential, while the average GOOGL stock price target of $244.14 suggests that the stock is fully valued at current levels.