Meta said to be pausing its very expensive AI hiring spree

Meta Platforms has reportedly paused hiring across its artificial intelligence unit after months of aggressively poaching top talent from its rivals.

The abrupt freeze, which began last week, is part of a wider reshuffle of the AI division and bars staff from transferring between internal teams, the Wall Street Journal reported. Any exceptions to outside hiring now require approval from Meta’s chief AI officer, Alexandr Wang, the report continues, adding that it's unclear how long the restrictions will remain in place.

In a statement to the Journal, Meta said it's engaging in routine planning and budgeting, and setting up clear structures for its Superintelligence Labs — a moonshot to develop systems that surpass human-level reasoning. The advertising and social-media giant didn't immediately respond to Quartz's request for comment.

Meta has been one of the most aggressive recruiters in the AI race, frequently outbidding rivals with lavish compensation packages and acquiring startups primarily for their talent. Analysts have questioned whether such heavy spending, particularly on stock-based pay, risks eroding shareholder returns.

The internal reorganization reportedly splits Meta's AI division into four branches: TBD Lab, which houses the superintelligence push; a products-focused team; an infrastructure group; and Fundamental AI Research, which remains mostly untouched.

Since April, CEO Mark Zuckerberg has personally courted researchers from OpenAI, Google DeepMind, and other labs, sometimes dangling nine-figure compensation packages that stretched into hundreds of millions. Meta has hired more than 50 specialists in recent months.

Sam Altman, however, doesn't believe this will be enough to revive Meta's edge, he said on a podcast in June, as attracting workers with financial incentives doesn’t always pay off long-term. “The degree to which they're focusing on that and not the work and not the mission, I don't think that's going to set up a great culture,” he said. "I don't think they're a company that's great at innovation,” he said of Meta. “Their current AI efforts have not worked as well as they hoped.”

Indeed, the overhaul follows disappointment with Meta’s Llama language model earlier this year, which underperformed expectations and led to the dismantling of the AGI Foundations team. Several members exited the company around the August 15 vesting date.

The costly hiring spree has also fueled investor unease. Morgan Stanley analysts wrote in an August 18 research note, viewed by the Journal, that escalating stock-based compensation offered by Meta and Google to lure AI talent undermine shareholder value if results fall short. Extravagant sign-on bonuses and salaries have "the potential to drive AI breakthroughs with massive value creation or could dilute shareholder value without any clear innovation gains," the analysts wrote.

The freeze comes days after The Verge reported that Altman said AI is in a bubble, which preceded this week's tech stock sell-off.

At a recent dinner in San Francisco with a small group of reporters, Altman was asked whether investors are collectively overhyping the AI space, and Altman reportedly replied, “Yes.” He compared the current surge of excitement with the dot-com boom of the late 90s, when investors piled into internet startups on the back of one undeniable fact: that the internet was a world-changing technology.

“When bubbles happen, smart people get overexcited about a kernel of truth,” Altman was quoted saying.

Since news broke on Friday of Altman's apprehensions, the S&P 500 is down 1.43%, while the Nasdaq Composite has lost 2.68%.