Meta Platforms (NASDAQ: META) shares slipped 1.2% on Wednesday, while Alibaba (NYSE: BABA) stock rose 2% after a Bloomberg report revealed that Meta is shifting toward a closed, monetizable AI strategy. The report said Meta is incorporating technology from several third-party providers, including Alibaba, as part of this new direction.
According to the report, Meta is developing a new AI model codenamed “Avocado,” which is expected to launch next spring. The model will be released as a fully closed system that Meta can tightly control and sell access to. This marks a major strategic break from CEO Mark Zuckerberg’s long-promoted open-source approach and brings Meta more in line with competitors such as Google and OpenAI, both of which rely on closed AI models.
Bloomberg also reported that Meta’s TBD Lab is drawing on external AI models for training Avocado — including Alibaba’s Qwen model. This is a noteworthy shift for Zuckerberg, who has previously raised concerns that Chinese AI systems may reflect state-driven censorship.
The strategic pivot comes after disappointment surrounding Meta’s Llama 4 open-source model earlier this year. Following its weaker-than-expected performance, Zuckerberg moved several team members off the project and began personally recruiting top AI talent. These efforts included bringing in Scale AI founder Alexandr Wang as Chief AI Officer through a $14.3 billion investment deal.
The report also highlighted internal strain within Meta’s AI division. Wang has reportedly grown frustrated with Zuckerberg’s close oversight of AI operations, while veteran AI researcher Yann LeCun recently left the company after long-running disagreements over resource allocation.
