Meta boosts AI talent pay, unveils cheap AI model as internal layoffs raise concerns

Meta Platforms is allocating multi‑hundred‑million‑dollar compensation packages to a small group of AI researchers and senior staff, while the broader workforce faces repeated layoffs, morale drops and union‑formation efforts. The company’s internal shift has been described as a "K‑shaped" organization, with AI talent receiving outsized rewards as other employees experience job insecurity.

In parallel, Meta announced its first paid developer API for a new AI model, Muse Spark 1.1, pricing the service at $1.25 per million input tokens and $4.25 per million output tokens. Zuckerberg said the move aims to undercut rivals such as OpenAI and Anthropic and to generate a direct revenue stream from AI.

The pricing push coincides with a broader market price war: Elon Musk’s SpaceX‑AI released a lower‑cost model, and Chinese firms continue to offer very cheap alternatives that are gaining market share. Meta also plans to start mass production of its own AI chip, MTIA 400, later this year to reduce reliance on Nvidia and AMD.

Internally, Meta’s AI rollout has been slower than expected. A recent town‑hall revealed that AI agents have not accelerated as hoped, and a controversial employee‑tracking program was paused after a data leak. These issues highlight the tension between Meta’s aggressive AI ambitions and the operational challenges it faces.