Meta CEO Mark Zuckerberg said the company’s Muse AI assistant and metaverse business could begin moving toward profitability next year. According to Sina Finance, Zuckerberg said on Wednesday’s third-quarter earnings call that Muse, launched last month, is not yet profitable because it requires substantial computing power, but Meta expects efficiency improvements to change that next year. He said that if computing efficiency continues to improve rapidly over the coming years, as Meta believes likely, Muse could generate substantial profits for years. Meta also plans to take a small fee from transactions facilitated by Muse, which is currently available only in the United States and Canada, partly because of its high computing requirements.

Meta earns more than 97% of its quarterly revenue from advertising, and investors have questioned the profitability of its AI and hardware businesses. Meta expects Reality Labs’ losses to narrow to about $15 billion in 2027, from an expected $18 billion to $19 billion this year. Zuckerberg said the division could begin moving gradually toward profitability next year as Meta’s AI systems improve its usefulness. Reality Labs develops Meta Ray-Ban smart glasses and virtual reality headsets. Zuckerberg also said he believes virtual reality is necessary to achieve holographic experiences that combine the physical and digital worlds and present them through everyday glasses.