Meta's Llama AI Monetization: Revenue Sharing Revealed
Meta, while seemingly committed to open-source AI with its Llama models, is quietly generating revenue through revenue-sharing agreements. This revelation comes from a recently unredacted court filing in the Kadrey v. Meta copyright lawsuit, shedding light on Meta's monetization strategy for its AI endeavors.
The Revenue-Sharing Model
According to the filing, Meta "shares a percentage of the revenue" that companies hosting Llama models generate from their users. This means that while developers can download, fine-tune, and run Llama models independently, Meta benefits financially when these models are used through partner platforms.
While the specific partners involved remain undisclosed in the filing, Meta has previously listed companies like AWS, Nvidia, Databricks, Groq, Dell, Azure, Google Cloud, and Snowflake as Llama host partners. These platforms often provide additional services and tools that simplify the deployment and management of Llama models.
Zuckerberg's Perspective
Meta CEO Mark Zuckerberg has hinted at potential monetization strategies for Llama. He mentioned the possibility of licensing access to Llama models during an earnings call, along with exploring other avenues like business messaging services and AI interaction ads. He stated that if companies like Microsoft, Amazon, or Google were reselling Llama-based services, Meta would expect a share of the revenue, clarifying they've already started doing so.
Zuckerberg has also emphasized the value Meta gains from the AI research community's contributions to Llama models. These models power various Meta products, including the Meta AI assistant. He believes that an open approach fosters industry-wide standardization and improves Meta's products. "I think it’s good business for us to do this in an open way," Zuckerberg said during Meta’s Q3 2024 earnings call. "[I]t makes our products better rather than if we were just on an island building a model that no one was kind of standardizing around in the industry.”
Implications of the Revenue Model
The existence of a direct revenue stream from Llama is particularly relevant to the Kadrey v. Meta lawsuit. The plaintiffs claim that Meta used pirated ebooks to train its Llama models and facilitated copyright infringement by "seeding" these works through torrenting. The fact that Meta is profiting from Llama, which is allegedly trained on copyrighted material, could strengthen the plaintiffs' case.
Meta is significantly increasing its capital expenditures, largely driven by its AI investments. The company plans to spend $60 billion to $80 billion on CapEx in 2025, which is roughly double Meta’s CapEx in 2024, primarily on data centers and growing the company’s AI development teams. To offset these costs, Meta is reportedly considering launching a subscription service for Meta AI, which will add new features to the AI assistant.
Source: TechCrunch