On 18 March, Meta announced it was shutting down Horizon Worlds, meaning the app will vanish from Quest hardware by 15 June.
Meta’s founder had pledged the space would “reach a billion people, host hundreds of billions of dollars of digital commerce, and support jobs for millions of creators and developers,” but the project garnered only a few hundred thousand monthly active users at its peak.
The hardware division tasked with building the billion‑person dream has amassed $73 billion in cumulative deficits since 2021; that is enough to spend £1 million a day for 200 years.
Ultimately, the platform’s end came with 1,500 redundancies from the hardware division in January and the closure of the studios built to populate a world almost nobody visited. The metaverse imploded because its design ignored human needs.
A Nomenclature Shift in Search of an Escape Hatch
The 2021 rebrand from Facebook to Meta happened at a precarious moment. Frances Haugen’s leaks had revealed Meta’s awareness of the harm its platforms caused, and the Libra cryptocurrency project had already collapsed under regulatory pressure.
TikTok was rapidly capturing younger audiences, and Apple’s privacy changes were eating into advertising revenue each quarter. The rebrand served as a strategic diversion, tying the company’s identity to a conceptual product and inviting the world to judge Meta against a visionary ideal.
Legless Avatars, Unanswered Questions
Hardware problems were clear from the first public demos. Per Ola Kristensson, a professor at the University of Cambridge, helped lead a study that asked participants to spend a full 40‑hour work week inside VR hardware. The findings showed lower perceived productivity and higher frustration.
Kristensson summed it up: people could do the work, but they would hate the experience. By 2022, Horizon Worlds had fewer than 200,000 monthly active users, a number dwarfed by Roblox’s 100 million daily. The metaverse was marketed to people craving real human connection, and the public voted with their hardware once the press conferences were over.
The AI Pivot and Familiar Expenditure Ratios
Capital once poured into Horizon Worlds is now flowing elsewhere, and the scale of the shift mirrors past patterns. On the Q4 2025 earnings call, Mark Zuckerberg told investors that the hardware division is directing most of its spending towards glasses and wearables.
Meta has projected between £115 billion and £135 billion in capital outlays for 2026, nearly double the £69.7 billion spent in 2025, with the bulk channelled toward artificial intelligence infrastructure.
Combined, US Big Tech AI capital outlays from Amazon, Google, Microsoft, and Meta are forecast to top £650 billion in 2026, despite negligible consumer AI returns. OpenAI has pledged to spend £1.4 trillion over eight years on data centres and expects annual operating deficits through 2028.
Insiders Start Counting the Cost
Top investors are now speaking openly about what this spending spree could mean. Sam Altman, CEO of OpenAI, admitted in 2025 that investors were overly enthusiastic about artificial intelligence and that people would overinvest and lose money.
Ray Dalio, who correctly predicted the 2008 financial crisis, compared current AI investment levels to the dot‑com bubble. A report from MIT’s Media Lab found that 95% of organisations are getting zero return on the tens of billions invested in enterprise generative AI.
A February study from the National Bureau of Economic Research found that executives expect productivity gains that have not yet shown up in workplace data.
Hype Cycles and the Price of Overreach
The wreckage of Horizon Worlds carries a lesson that reaches far beyond Silicon Valley. One industry insider told LBBOnline that hype cycles thrive on feverish expectations. The tools we use today are real and their capabilities are proven, but the crisis comes when too many executives adopt AI as a performative accessory, chasing fleeting novelty.
Artificial intelligence is different from the metaverse because the underlying technology has measurable practical uses in medicine, logistics, and software development. A market correction will spare applications built on real utility and sweep away those built on boardroom enthusiasm alone.
Europe’s Quiet Lead
Europe has watched the AI spending surge with measured scepticism, and the continent’s instincts are proving right. The EU’s Artificial Intelligence Act, the world’s first comprehensive legal framework for AI, has placed Europe in a position to demand transparency and measurable public benefit.
European workers and businesses deserve AI tools built by developers who respond to the real needs of the workforce. Oversight ensures human utility is proven before the bill comes due.
Accountability Travels Downhill
The main lesson from the metaverse’s collapse is about who bears the risk. Mark Zuckerberg, protected by a voting structure that insulates him from investor veto, spent nearly £80 billion of the company’s money on a product that Meta’s own staff reportedly shunned.
The economic consequences of that gamble fell on workers, including the 1,500 staff laid off from the hardware division in January. The current AI bet is on an even larger scale; as economists have noted, AI‑related investment accounts for more than half of US GDP growth.
A sharp correction would have consequences for workers worldwide, including in Europe. When elites make decisions detached from reality, the fallout always hits the most vulnerable.
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