WHEN: Today, Wednesday, June 22, 2022
WHERE: CNBC's "Mad Money"
Following is the unofficial transcript of a CNBC exclusive interview with Meta Founder, Chairman & CEO Mark Zuckerberg on CNBC's "Mad Money" (M-F, 6PM-7PM ET) today, Wednesday, June 22nd. Following is a link to video on CNBC.com: https://www.cnbc.com/video/2022/06/22/metas-mark-zuckerberg-on-seeing-a-massive-economy-around-the-metaverse.html.
All references must be sourced to CNBC.
JIM CRAMER: Alright, what are we are doing with Meta Platforms, the artist formerly known as Facebook. Not that its stock has come down nearly 60% from its highs last year. Meta, which is a huge position from my charitable trust, is a real company with real earnings so its stock gets cheaper as it goes lower. But it's got some difficulties from Apple's new privacy rules, make it harder to do targeted advertising, competition from TikTok, to a general slowdown in online advertising as the economy takes a hit. That said, betting against these guys has historically been a huge mistake, and the company's got some amazing opportunities, like the Metaverse. Tonight, we're getting a rare chance to talk all about all of this with Mark Zuckerberg, the genius Founder and CEO of Meta Platforms, on air for the first time. Mr. Zuckerberg, welcome to "Mad Money."
MARK ZUCKERBERG: Hey, thanks for having me on.
CRAMER: Of course. Now, Mark when I first heard you were going to devote a great deal of time to the Metaverse, I gotta be candid. It concerned me. I thought it might be maybe an expensive distraction. Call me a skeptic. But after what I saw last night, putting on the Oculus Quest 2, I'm now wondering if this isn't your – strong suit. It's about amazing conductivity, which produces wonderment and may be multiple billions of dollars for shareholders. Crazy?
ZUCKERBERG: Well look, there are two big trends that are going on in our business. One is this massive wave of AI powering all of social media and advertising, and I want to make sure we talk about that, too. But the second one is certainly going to be the Metaverse over time. And you know, the thing that we see there is that the 18 years that I've run this company, people always want the most expressive and enriched way to communicate. So, it started off with text primarily, right, in 2004. Then we got phones that had cameras, and the main medium became photos. Now as mobile networks get good, it becomes video. So we're seeing that with Reels and things like that. But that's not the end of the line. There's going to be something after that which is even more immersive and that's why I'm so focused on this kind of immersive environment where you feel a sense of presence with other people or other places no matter where you actually are. So the Metaverse, it's this broad thing. It's not just virtual and augmented reality, although those are going to be some of the new major computing platforms that need to get invented for this. But it's also I think going to be the next kind of most immersive, enriched way that people want to express themselves across social media too. So it kind of goes across everything that we do, and it's going to be a big theme for us over the next decade.
CRAMER: Well, I can see after last night that that's true. We took a meeting together in a zen garden. Candidly, that is a new posture for me, zen. But was interesting was it was lifelike in a way that I've never felt. Not artificial, but not real. Natural, but also whimsical. Now, is that AI speaking? Is that Mark Zuckerberg speaking? Because it was extraordinary.
ZUCKERBERG: Well, there's a lot of pretty deep technology that goes into this. And the defining characteristic of the Metaverse and these new platforms is the ability to feel the sense of presence like you just described that we were right there together even though I'm out in California and you're in New York, we could sit at a conference room table together and have it really feel like we were a couple of feet apart. I mean, you know, we could fist bump or give each other a high five and you can make eye contact, which is hard to do on video chat. You have spatial audio so if other people in the room were having a different conversation, I could turn to you and whisper and we got a side conversation like we were physically there. But there's all this technology that basically adds up to making it deliver this realistic sense of presence. And a bunch that is AI and a bunch of it is just you know pretty deep software systems engineering and good hardware engineering, too. But in order to really deliver these experiences over the next several years, we kind of feel like we need to develop, but we need to build a whole stack, right, from the hardware all the way up to the software and then a bunch of the experiences on top of that. So we're gonna do that. And it's a big focus for us. You know, we are at this point, you know, a company that can afford to make some big long term research investments. And this is a big focus, but at the same time, we're also really focused on driving the core social media work that we're doing forward, as well as the ads business.
CRAMER: Well, that makes sense to me. I mean, for instance, you want to combine all these things as you mentioned, the hardware – $300 on Amazon. But I'll tell you, for some of the things that I saw, I would play – I would buy say Meta bucks, you know, just to use a term like Fortnite, and I would go to a store, I would go to entertainment. I would try on clothes for my avatar and I would buy clothes for my avatar. All a possibility?
ZUCKERBERG: Yeah, I mean, I think that this is where we're going. Our Northstar is that, you know, by the end of the decade, we hope to basically get to around a billion people in the Metaverse doing hundreds of dollars of commerce each buying digital goods, digital content, different things to express themselves. So whether that's clothing for their avatar or different digital goods for their virtual home or things to decorate their virtual conference room, utilities to be able to be more productive in virtual and augmented reality and across the metaverse overall. So I think there's going to be a massive economy around this. It's going to create a lot of opportunity for creators. That's why you hear me talking about the creator economy so much I'm just really excited about a world where you're gonna have millions of more people who can do creative work that just makes them happy at their job instead of some of the things that they might be doing today because they just feel like they need to in order to make money. I think that's gonna be a massive opportunity. But certainly I think it's a huge business opportunity for us too, for the reasons that you say. You know, our playbook over time has been build services, try to serve as many people as possible – you know, get our services to 1 billion, 2 billion, 3 billion people – and then we basically scale the monetization after that. We've done that with Facebook and Instagram. WhatsApp is really going to be the next chapter with business messaging and commerce being a big thing there. But then, you know, around the Metaverse and all the commerce and digital goods around that, I think that's going to be a really big leg of our of our business, especially over the next several years as we get into the second half of this decade, too.
CRAMER: I know that you talked about how it's going to take a long time. What I saw last night, when I consider the creators who you are giving a break to until 2024, they do it on their own. I felt that it would be faster, but it also concerned me because you and I have talked about this before, inequality. Don't want a situation where there are people who are disadvantaged because I think the educational concerns, I think the industrial, I think the music, I think entertainment. I don't want it to be lopsided and I'm sure you don't either. That's not been the things that you do, mostly behind the scenes. How do we be sure that we have equality in the Metaverse?
ZUCKERBERG: Yeah, well, let me hit both of that. Both of those points. So we're very focused on making sure that we get a wide base of creators building these experiences, this can be a diverse thing. It needs to appeal to everyone, right? We want to – both for the equity reasons that you say and frankly because that'll make it a bigger opportunity, right? We want to make sure that this can serve as many people around the world. So that's really critical. So we're sitting down, we're doing these sessions and the series – culture – with all different kinds of creators to make sure that they're trained up on the different tools to build these different experiences for the metaverse so this is a big deal. We want to get it right from the bottom up and kind of get a lot of different folks in early. You know, when you said, "Hey, why is this going to take so long?" I think part of it is just the scale, but the other thing is that we do our ad. You know, when you're talking about our apps reaching billions of people – Quest 2 has been a hit. I've been really happy with how that's gone. It is exceeded my expectations. But I still think it's going to take a while for it to get to the scale of, you know, several hundreds of millions or even billions of people in the Metaverse just because things take some time to get there. So that's the Northstar. I think we will get there. But you know, the other services that we run are at a somewhat larger scale already today.
CRAMER: Well, we're gonna get to those in a second. I don't want anyone to go away. We have more with Mark Zuckerberg after the break. We are still out of the Metaverse but we were in it last night. A lot of good clips right behind me. Stick with "Mad Money." In one moment we'll be back, Mark.
CRAMER: Alright, when you get Mark Zuckerberg, the Founder and CEO of Meta Platforms, formerly Facebook, you got to use the opportunity to really drill down on what's happening at this colossal company so let's get back right to it. Mark, we are in the Metaverse, I am so confident that there's billions of dollars to be had. At the same time this, if we do have a recession, will be the first as a public company. What are your plans and are you worried that advertising historically has been a weak part during a recession?
ZUCKERBERG: Well, I mean, over the course of running this company, we have gone through recessions and we're, you know, we'll navigate that however we need to but look, I mean, the way that I think about this is there are two major underlying trends that are driving our business. We talked about one the Metaverse is the longer term one. In the near term, AI is just this really massive wave that we're riding for all of our services, right? So for social media, AI is helping us rank better content and be able to show people better content like Reels so that's that's the the new short form video service that we're that we're building. We're already 20% of the time that people spend on Instagram is in Reels and 50% of the time that people spend on Facebook is in video of which a meaningful part of that is Reels and growing. So ranking that content is a big deal. For the ad system, being able to put the most interesting and relevant ads in front of people is it basically a big AI problem and we're basically positioning our company to ride this wave of AI innovation, and it just makes all of these different services better. So we're making we're making big investments in this and we're gonna keep on doing that, you know, obviously, we will modulate it a bit if there's a recession, but we're going to keep on investing pretty heavily in this. We just brought online the AI research supercluster which, you know, we believe is going to be the fastest AI supercomputer when it's fully built out later this year, so that our researchers can build new and bigger models to both make the ranking and recommendations across our social media services and ads better. So I mean, we're kind of, we're going hard at this and I think that that's the right thing to do because there's a lot of innovation to be had and a lot of improvements to all these services.
CRAMER: Well, I think that as someone who was using a commercially Reels, it's gotten better. Now maybe that's AI and I think that people are just saying that TikTok has run over you 12-billion-dollar potential. This the the changes I've seen in the last even six weeks indicate that that may not be as much of an unfair fight, and that the Reels is doing better than people think.
ZUCKERBERG: Yeah, I mean Reels is doing quite well and I think it's going to continue doing well. I mean, we're basically seeing a couple of big trends there. One is growth of video where we talked about before how people want to express themselves and consume content of the richest format so going from text to photos to videos is really the main thing right now. And then I think eventually we'll get to immersive content, but today we're really primarily video. So there's that big tailwind. And then the other one is we're basically shifting from having most of the content that you see in Facebook and Instagram come from your friend or follow graph to now, you know, over time having more and more of that content just come from AI recommendations and as the AI recommendations get better, you get access to not just the content from the people who you follow, but the whole universe of content that's out there. Our AI system can can choose based on what it knows about you and what you personally are going to be interested in and want to learn about what you want to see so as we get better at that in our engineers are shipping improvements to the models every week. You know, we check something in and, you know, relevance goes up by a few percent and we repeat and do that the next week and, you know, this is just a huge part of what I've always focused on in running this company is getting the velocity to be very quick so we can keep on making fast improvements to this which is, you know, and then eventually you reach tipping points like what you just said about where Reels is where I mean already being at 20% of the time in Instagram is a pretty big deal, but I think that there's a lot more to go there.
CRAMER: Well, it also sounds like particularly with the Metaverse, then you'll have your own operating system. Some people feel that you became dependent on others, including Apple. If you develop your own operating system, then I think that a lot of the private, so-called privacy concerns, may no longer be something that is bringing the stock of Meta down.
ZUCKERBERG: Well, I mean, I think over the long term, we're going to need this level of integration between the hardware and operating system and the services that we're building just in order to be able to deliver the experiences that we want to build. So I think that that's a big part of the the metaverse investment that we're making, the AI investments that will also go towards that. But yeah, I mean, I think that those investments are really setting up our company to build a new pillar of the business and be a lot stronger for a decade or two to come. But, you know, the things that are driving the most results right now in terms of making the products better on a day to day basis and making the the ads more relevant and driving the business results is really just these massive improvements in the AI work that we're doing and the just quick velocity of being able to just have all these engineers empowered to try out building different models and just have that contribute to better relevance and of what we're showing that that makes it so that the services are better whether you're in Instagram or Facebook or if you're an advertiser or if you're, if you're just across all the different things that we do.
CRAMER: Okay, that's excellent because that's what I'm seeing myself. Now, I wanted to ask you when I first met your team, I was grateful to be working with Sheryl Sandberg. She was helping out small business. You know, that's my passion. She was helping me create sites, give them the support they need, especially less capitalized, and also companies owned by minorities. This was an incredibly important roll, not just for obviously for Facebook, but for the country. I thought again much bigger than the advertising job that she's often pegged with. Can she be replaced given the fact that this was something that I felt was also heart and soul Facebook?
ZUCKERBERG: Yeah, I mean, it is the end of an era for the company. I mean Sheryl's an amazing person. It's it's hard to give her enough credit for what she's done to build this company. I mean, she didn't just build the and architect the advertising business, you know, like you just said, but she has really created the management culture in our company. She trained me to be a manager and leader as well as most of the rest of our our management team. She's, she's amazing and I'm glad that she's going to remain on our board so I can continue to tap her for for advice, and I'm sure she'll stay a close friend, but there's no doubt that it's going to be a different world running this company without her. Now for where we are today, I don't I don't really think that that makes sense to replace her role directly for a couple of reasons. One is she's somewhat of this irreplaceable person, right? She's a superstar and kind of crafted the role in a specific way. But the other thing is just for where we are today, you know, I don't really think it makes sense anymore for us to have a product and engineering side and a business side of the company. I think it needs to be a lot more integrated. So what we're doing is basically taking the different business functions and operations functions and combining them in with the product functions to have a much more integrated and functional company. So Javier Olivan who's who's long run a lot of the company and is overseeing all of our ads engineering and commerce engineering and all that, we're basically going to have all the sales folks, led by Marne Levine, our Chief Business Officer, are going to basically come together in that in that group and a lot of our community operations work is now going to come together under Chris Cox who's another, he's our Chief Product Officer, a really key longtime leader of the company who's leading the effort on things like like Reels and things that we've talked about. So all of the the operations piece and and the product development is going to come together there and I actually think that for where we are now, the silver lining on this is that I think probably is a good organizational structure because we're just not, the way we run the company now, it's not like I write some code on the side and Sheryl goes and builds the business. It really does need to be a deeply integrated thing.
CRAMER: Well, this is a good opportunity. The press is filled with these stories, she wouldn't have stayed on the board that there are issues, investigations with Sheryl Sandberg. I've not been able to confirm any of that. I'd like to put it to rest right now.
ZUCKERBERG: Well, look what I can say is, you know, I don't think that any of the stuff that's been reported contributed to her leaving the company. Of course, you'd have to ask her about that. But what I can say is, I have nothing but gratitude for the amazing work that she has done at the company. She's gonna stay on our board. She's a key person. She's a close friend. It really is and I can list off her accomplishments, but it's just, it's almost impossible to overstate how important she's been in the development of the company and it's personally important to me, you know, I've seen some of this reporting too and obviously, when people allege things, it's important to kind of look into it and understand what's going on, but but from from my perspective, I just think no one should think that our company has anything but gratitude and love for the amazing amount of value that Sheryl has created. And that's certainly how I feel and that's, you know, deeply what I see our management team feels to.
CRAMER: Now I know that there there was more scrutiny of what you were up to because I think of some of the things that, you know, there are many things that didn't go as exactly as planned. But let me ask you, I've seen the the parental controls that you want for Metaverse, I think they're strong. The Wall Street Journal agrees with me that they're strong. Were some of these things because of what you learned from initially with Facebook and are you more willing to be able to say, you know what, we've got to work with different constituencies to get this right so there's nobody who just says, you know what, I don't want to go back in the world because I'm in the Metaverse and it's just so much better than my real life.
ZUCKERBERG: Yeah, I mean, one of the lessons that I've learned over the last several years is we have to build these kind of safety controls in from the beginning of these products and we should also work with different stakeholders and policymakers and different experts to figure out what the different controls should be and we have the opportunity to do that now with the Metaverse from the ground up. So you know, one of the things that we launched in our Horizon social platform is this feature called Personal Boundary, where literally you have a space around you that's like a few feet where other people cannot come within that space. You can you can take it down if you want if you want people to be able to come closer, but just makes it so that people can't can't kind of get in your in your in your space if it's going to make you uncomfortable. You can block people and have them disappear if they're bothering you, which obviously I think is something that a lot of people would like to do in the physical world, but it's not a feature of the physical world. So that that will be something that I think will make the Metaverse a lot more comfortable for people. And we're going to keep on working on this. I mean, this is just the beginning. But we do have the opportunity to get this feeling of safety and comfort and control really built into these things from the beginning and that's the thing that we're all committed to doing.
CRAMER: Alright well one last question because sorry I'm a stock guy, huge cash. Obviously you're a believer in the Metaverse, how are you going to continue to continue to buy back stock here, plow it back into Metaverse, which I now think is maybe the right thing to do because it could be trillions. I'm not being too aggressive with that. You have articles which say that it could be a 3, 4 trillion-dollar economy in the Metaverse, what's the right thing to do for shareholders at Meta?
ZUCKERBERG: Well, I mean, I think it's all of the things that we've talked about. So I am going to keep on making the long term investments in the metaverse because I do believe that's the next platform and medium and I think that that's that's the right thing for shareholders and the company over the long term and I think it's going to deliver some amazing products. Also going to invest a lot in AI because I think that that infrastructure is going to deliver a lot of the returns and make the experiences across Facebook and Instagram and our ads and all the other things that we do better over the next several years as well while we're waiting for the next set of platforms to kick in. So that's a big deal and that's a big set of investments. But you know, like you said, you know, we're quite profitable and I think we have enough capital and from what we do to do the two things, you know, make the AI investment, make the metaverse investment and also return more capital to shareholders. So I mean, that's something that that, you know, I don't unilaterally make those decisions. You know, that's something that that we discuss with, with the with the board and all that so I don't have anything new to announce on that today but you know, I think, you know, we we have a big enough platform as a company that I think we should be able to do all three of those and I think it's the right thing for the company to do all three of those to push ahead, improving the business, positioning us for the long term and and returning capital.
CRAMER: Alright well Mark, I want to thank you. Thank you for introducing me to metaverse, thank you for your time today and it's always good to see you. Thank you.
ZUCKERBERG: You too. Thanks for having me.