Meta's advertising growth is proof that hefty AI spending is already paying off

For investors who are skeptical of Meta's massive spending on artificial intelligence and whether it will pay off anytime soon, CEO Mark Zuckerberg is urging them to look to the present.

After the company's better-than-expected second-quarter earnings report on Wednesday, Zuckerberg and finance chief Susan Li rattled off all the ways that AI has helped the company grow faster than the competition in the digital advertising market, Meta's core business.

"The ways that it's improving recommendations and helping people find better content, as well as making the advertising experiences more effective, I think there's a lot of upside there," Zuckerberg said on the earnings call. "Those are already products that are at scale. The AI work that we're doing is going to improve that."

Meta reported revenue growth of 22% from a year earlier to $39.07 billion, with 98% of its sales coming from advertising, primarily on Facebook and Instagram. Its growth rate was double that of Google's ad business, which saw sales increase 11% to $64.6 billion, Alphabet said in its earnings report last week.

Meanwhile, Pinterest and Spotify, which are both significantly smaller than Meta, reported revenue growth of 21% and 20%, respectively, in their latest reports.

As in previous quarters, Li said Meta's advertising business benefited from online commerce, gaming and the media and entertainment sectors, and that ad growth continued to be strongest in the Asia-Pacific region. She said the company's "improved ad performance" helped lift overall ad prices despite slowing growth in that region.

Zuckerberg pointed to AI as the foundation behind Meta's refreshed online advertising platform, which was battered after Apple introduced an iOS privacy update in