Meta has revenue-sharing agreements with Llama AI model hosts, a filing reveals

Meta revenue shares from Llama AI model hosts through agreements.

: Meta revealed through a court filing in Kadrey v. Meta that it shares revenue with companies hosting its Llama AI models. CEO Mark Zuckerberg had previously stated that selling access was not the business model, though he hinted at licensing. Llama models are hosted by partners like AWS and Google Cloud, providing easier setup. Meta plans increased investment in AI, with potential for a Meta AI subscription service.

Recent developments have highlighted that Meta engages in revenue-sharing agreements with companies hosting its Llama AI models, as revealed in a court filing by attorneys in the lawsuit Kadrey v. Meta. This information contradicts a prior statement from Meta's CEO, Mark Zuckerberg, who declared that "selling access" to Llama AI models wasn't Meta's core business strategy. Through these agreements, Meta receives a share of the revenue generated by these hosts from users leveraging the Llama models, although specific details about which hosts pay Meta were not disclosed.

Despite this, Meta regularly lists several renowned host partners in its communications, including AWS, Nvidia, Databricks, Groq, Dell, Azure, Google Cloud, and Snowflake. Hosting partners typically provide enhanced services and tools, facilitating easier deployment and management of model instances. Notably, developers have the flexibility either to utilize official hosts or operate the models independently on various hardware configurations. This approach broadens Llama's accessibility and functionality within different environments.

Zuckerberg hinted at monetization possibilities involving Llama during an earnings call, suggesting potential licensing as well as integrating Llama into business messaging services and advertising elements within "AI interactions." He acknowledged ongoing efforts to establish revenue-sharing deals, especially with major tech entities like Microsoft, Amazon, and Google, outlining: "So those are the deals that we intend to be making, and we’ve started doing that a little bit."

The court filing also underscores the legal implications as the lawsuit claims that Meta utilized pirated e-books in developing the Llama AI models, possibly infringing copyrights. Plaintiffs contend that Meta employed torrenting techniques, an internet-based file-sharing practice often used for distributing large files, to obtain these e-books illegitimately. The allegations further accuse Meta of facilitating this infringement by inadvertently sharing the e-books due to the inherent file-sharing characteristics of torrenting.

From a financial and strategic perspective, Meta aims to bolster its capital expenditures, particularly focusing on AI. The company announced plans to increase its spending dramatically, with $60 billion-$80 billion slated for capital investments by 2025, targeting infrastructure enhancements like data centers and AI team expansions. To balance these expenditures, Meta is also exploring the introduction of a subscription-based service for its Meta AI platform that may incorporate additional functionalities.

Sources: TechCrunch, Meta conference transcripts, Related court documents

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