Meta freezes AI hiring after $14B spending spree and costly talent poaching: Is the AI bubble bursting?

Meta has slammed the brakes on hiring for its artificial intelligence division, a sudden pause that follows one of the most expensive talent grabs Silicon Valley has seen in years.

The move, first reported by The Wall Street Journal, marks the end of a spending spree in which the company acquired more than 50 high-profile AI researchers and engineers, often with jaw-dropping offers. Some recruits were reportedly offered bonuses as high as $100 million. The freeze took effect last week and coincides with a sweeping reorganization of Meta’s sprawling AI efforts.

“Meta Platforms has frozen hiring in its artificial-intelligence division after spending months scooping up 50-plus AI researchers and engineers. The hiring freeze, which went into effect last week and coincides with a broader restructuring of the group, also prohibits current employees from moving across teams inside the division. The duration of the freeze wasn’t communicated internally,” The Journal reported, citing people familiar with the matter.

A spokesperson told CNBC the pause was part of “some basic organizational planning: creating a solid structure for our new superintelligence efforts after bringing people on board and undertaking yearly budgeting and planning exercises.”

Inside Meta, the restructuring has split its AI work into four groups. According to a report from CNBC, there’s a team dedicated to building machine superintelligence—nicknamed the “TBD lab”—alongside an AI products group, an infrastructure unit, and another focused on longer-term research. Together, they form the umbrella of “Meta Superintelligence Labs,” a name that reflects Mark Zuckerberg’s ambition to push beyond human-level intelligence.

This year alone, Meta has gone all-in on that vision. In one of its boldest moves, the company poured $14.3 billion into Scale AI for a 49% stake, bringing founder Alexandr Wang into the fold to lead Meta’s Llama-focused lab. It was the latest in a series of blockbuster bets designed to plant Meta firmly at the center of the AI arms race.

Is the AI Bubble Bursting?

But the buying spree has raised eyebrows across Wall Street. Investors have grown uneasy with the pace of spending as tech stocks face renewed pressure and high valuations spark debate about whether the industry is rushing too far, too fast. That tension only sharpened this week after OpenAI’s Sam Altman told reporters he believes AI is in a bubble.

Not everyone agrees. Wedbush analyst Dan Ives called the freeze a “natural resting point,” arguing Meta is in digestion mode after throwing billions at talent and infrastructure. “Altman is the golden child of the AI Revolution, and there could be aspects of the AI food chain that show some froth over time, but overall, we believe tech stocks are undervalued relative to this 4th Industrial Revolution,” he said.

Daniel Newman, CEO of Futurum Group, added that Meta’s pause is less about retreat and more about regrouping. After locking in talent with nine-figure offers, the company needs time to integrate its recruits and assess whether they’re positioned to deliver the breakthroughs Zuckerberg is betting on.

Whether this signals a cautious reset or the first cracks in the AI bubble remains to be seen. What’s clear is that Meta has burned through billions to get here—and investors are watching closely to see if the company’s AI gamble pays off.