Meta lost 20 million users last quarter, blames Iran and Russia

Meta is pouring billions more into AI this year, even as its user numbers take a hit. The company reported on Wednesday that its “Family daily active people” — that’s the combined user count across Facebook, Instagram, WhatsApp, and Messenger — dropped by 20 million last quarter compared to the previous three months.

That’s a notable decline for a company that has spent years bundling its apps together to show steady growth. Meta’s explanation? Internet disruptions in Iran and a restriction on WhatsApp in Russia. Take that with however much salt you want.

It’s not hard to be skeptical here. Meta has a history of lumping stats together in ways that make the numbers look better than they are. And blaming geopolitical events for a user decline feels convenient, especially when the company is simultaneously announcing plans to spend even more on AI infrastructure.

The timing is awkward. Meta is all-in on AI, with Mark Zuckerberg talking up generative AI features and massive compute investments. But if the user base is shrinking, even by a relatively small percentage, it raises questions about whether those billions are being spent on the right things.

To be fair, 20 million users is a drop in the bucket when you’re talking about over 3 billion daily actives across the family. But the trend matters more than the absolute number. If this becomes a pattern, Meta has a real problem on its hands.

I’ve been watching Meta’s user numbers for years, and this is the first time I’ve seen a decline of this magnitude attributed to external factors. Usually, the company finds a way to spin things. This time, they’re being upfront about the drop but vague on the recovery plan.

The Iran and Russia excuses might be partially true — both countries have had significant internet restrictions. But Meta’s user growth has been slowing in mature markets for a while. Younger users are drifting to TikTok, and Facebook feels increasingly like a platform for older generations.

Meanwhile, the AI spending spree continues. Meta plans to invest billions more this year, with a focus on building out its AI infrastructure and integrating generative AI into its products. That’s a gamble that assumes the user base will either stabilize or grow enough to justify the expense.

If I were an investor, I’d be watching next quarter’s numbers closely. One quarter of decline can be written off. Two quarters start to look like a trend. And if the AI investments don’t start showing returns soon, Meta might find itself in a tough spot.

For now, the company is sticking to its story: the dip is temporary, the AI bet is the right one, and everything will be fine. We’ll see.