Meta Reshapes Metaverse Unit, AI Takes Center Stage

What's the Big Deal?

Meta is reportedly shaking up its Reality Labs and Metaverse divisions, signaling a strategic pivot. The tech giant is doubling down on integrating advanced artificial intelligence across all its products, positioning AI as the new cornerstone of its ambitious metaverse vision.

This isn't just a minor organizational tweak. It marks a significant internal shift, as the company reallocates key leadership and resources. Expect to see AI's fingerprints on everything from your social feeds to your virtual reality experiences.

What Happened

According to a Business Insider report, a memo from Meta CTO Andrew Bosworth details the restructuring. Vishal Shah, who led Reality Labs for four years and was a public face of Meta's metaverse efforts, is moving into a new role. He will now head AI Products within Meta Superintelligence Labs (MSL), a fresh division focused on developing and integrating "personal superintelligence" into Meta’s platforms.

Shah's new mandate involves overseeing AI integrations across both Meta’s Family of Apps (FoA) – think Facebook and Instagram – and Reality Labs (RL). He will report directly to MSL head Nat Friedman. Bosworth's memo describes Shah's transition as crucial for merging metaverse innovation with Meta’s vision for artificial general intelligence (AGI), a concept CEO Mark Zuckerberg outlined in July 2025.

Shah himself candidly noted his transition is "difficult yet exciting," acknowledging that "metaverse hype has thankfully died down." He believes machine-learning tools will be the "transformative shift of our generation," enabling personalized, context-aware experiences that bridge virtual and physical worlds. Filling Shah's previous role, Gabriel Aul will now lead the Metaverse Product Group, overseeing teams responsible for Horizon Experiences. Ryan Cairns will continue to lead Horizon OS, which has been elevated to an org-level product group, reporting directly to Bosworth.

Why It Matters

Despite the leadership shuffle, Bosworth insists the metaverse remains a company-wide priority. He argues Meta has proven its thesis, with competitors now scrambling to catch up. However, the move signals a clear shift in *how* Meta intends to build that future. The focus is less on VR as the sole driver and more on a broader platform empowered by AI.

Meta has noticeably decreased funding for high-quality virtual reality content. Instead, it prioritizes boosting concurrent user numbers on its Horizon Worlds app, which became available on mobile and web in late 2023. This is a pragmatic move for a publicly traded company seeking broader adoption, even if it's disappointing for dedicated VR enthusiasts hoping for more immersive single-player games.

The company’s early success with smart glasses, dubbed 'AI glasses,' likely tipped the scales. While traditional VR development demands colossal investment with slow returns, true augmented reality (AR) glasses remain a distant dream. Smart glasses, however, offer an immediate opportunity for Meta to flex its extended reality (XR) muscles with a much larger consumer base today.

These proactive AI capabilities embedded in smart glasses could revolutionize daily interactions. Imagine an intelligent agent quietly answering questions like, "What's that person's name?" or "How long should I cook this steak?" This moves beyond reactive smartphone searches to context-aware, on-demand information. While undeniably useful and potentially profitable, this level of pervasive AI raises valid privacy concerns, bordering on a dystopian future where Meta-controlled algorithms access your every waking thought and memory.

Our Take

Let's be blunt: Meta's center of gravity is decisively shifting from metaverse-first to AI-first. Shah's promotion into the heart of Meta Superintelligence Labs is a testament to this reorientation, regardless of official memos emphasizing continued metaverse commitment. The metaverse isn't dead; it's simply being re-engineered with AI as its foundational operating system.

The current traction for devices like Meta Ray-Ban Display glasses, despite their hefty price tag, showcases the immediate power of AI. Features like the Neural Band for input hint at a future where intuitive interaction beats clunky gestures or typing. Crucially, Meta has achieved this early success without needing to launch multiple hardware generations, cultivate a vast developer ecosystem, or even establish a dedicated app store. Core AI use cases appear sufficient for now, which is a significant departure from traditional tech product launches.

This strategic pivot is a smart one, reflecting market realities and investor demands. By weaving sophisticated machine-learning tools into its existing platforms and new hardware, Meta aims to create a more integrated, intelligent, and ultimately, more profitable ecosystem. This could secure its competitive advantage in an increasingly AI-driven tech landscape, even if it means a slightly different vision for the 'metaverse' than originally imagined.