Meta is under pressure from OpenAI’s new app, Sora 2, which blends AI video generation with a social feed reminiscent of TikTok, quickly reaching over a million downloads in just five days. This rapid growth eclipsed that of the ChatGPT app, suggesting a potential threat to Meta’s user engagement on platforms like Facebook and Instagram, where advertising generates nearly all of its revenue. Analyst Michael Nathanson warns that any disruption in Meta’s ‘engagement flywheel’ could dampen investor sentiment, though he remains optimistic about the company’s resilience. In response, Meta has introduced its own short-form video feature, Vibes, aimed at bolstering growth despite initial traction lagging behind Sora 2. However, concerns are rising about long-term user retention on Sora 2, with reports indicating a significant drop in daily active users post-launch. As Meta prepares for its Q3 earnings release, the competitive landscape in AI-generated content remains uncertain.
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