Meta Earns Some Revenue From Llama AI Model Despite Public Claims, Court Filing Reveals

Meta Earns Some Revenue From Llama AI Model Despite Public Claims, Court Filing Reveals

  • 24.03.2025 03:58
  • businessworld.in
  • Keywords: AI

Meta receives revenue from companies hosting its Llama AI models, including major tech firms like AWS and Azure, despite public claims of not monetizing them. The company faces copyright infringement allegations for using pirated e-books to train Llama and sharing data through torrent networks.

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Estimated market influence

Meta

Meta

Positivesentiment_satisfied
Analyst rating: Strong buy

Meta is a major company in AI development and has significant influence through its products like Llama.

Amazon Web Services (AWS)

Neutralsentiment_neutral
Analyst rating: N/A

Mentioned as a partner hosting Llama models, but no specific impact noted.

Context

Business Insights and Market Implications

Key Revenue Streams

  • Meta Earns Revenue: Meta receives a percentage of revenue from companies hosting and offering Llama AI models, revealed in court filings related to the copyright infringement lawsuit Kadrey v. Meta.
  • Partnerships: Meta has publicly named several partners, including Amazon Web Services (AWS), Microsoft’s Azure, Google Cloud, Nvidia, Databricks, Snowflake, Dell, and Groq.

Market Trends

  • AI Model Adoption: Many developers opt to access Llama models through cloud hosts that offer additional tools and support, generating income for Meta.
  • Contradiction in Business Model: Despite Zuckerberg’s public claims that selling access to Llama was not Meta’s business model, internal documents reveal revenue sharing arrangements.

Competitive Dynamics

  • Licensing Opportunities: Zuckerberg hinted at licensing opportunities during an April 2024 earnings call, stating Meta expected to earn a portion of revenue when major tech firms resold services based on Llama.
  • AI Investment: Meta is significantly increasing its investment in artificial intelligence, with projected capital expenditures between USD 60 billion and USD 80 billion in 2025.

Legal and Regulatory Implications

  • Copyright Infringement Lawsuit: Plaintiffs claim Meta used hundreds of terabytes of pirated e-books to train Llama and facilitated infringement by sharing materials through torrent networks.
  • Potential Risks: The lawsuit could set a precedent for AI companies’ data acquisition methods and licensing practices.

Strategic Considerations

  • Long-Term Effects: Meta’s focus on community-driven improvements suggests a strategic balance between monetization and innovation, with Zuckerberg emphasizing that Llama makes their products better.
  • Subscription Model: Meta is exploring a subscription tier for its Meta AI assistant to offset growing costs associated with AI development.

Financial Projections

  • Capital Expenditures: Meta’s 2025 capital expenditures are projected to increase from 2024 levels, primarily allocated to data centers and AI development.
  • Revenue Potential: While Llama generates revenue through partnerships, its primary value for Meta lies in community-driven improvements rather than direct monetization.

Industry Impact

  • AI Ecosystem: The revelation of Meta’s revenue-sharing model highlights the growing importance of partnerships and licensing in the AI ecosystem.
  • Transparency Issues: The contradiction between public statements and internal practices raises questions about transparency and could impact stakeholder trust.