In a sharply worded newsletter published on December 28, 2025, economist Dean Baker posed a provocative question: “Did Mark Zuckerberg throw $77 billion of our money into the toilet?” While the headline targets Meta’s failed Metaverse ambitions, Baker’s core argument goes far beyond shareholder losses. According to the co-founder of the Center for Economic and Policy Research (CEPR), the collapse of Meta’s Reality Labs is not just a corporate misstep it represents a broader economic and social failure rooted in wasted real-world resources.
Why Meta’s Metaverse Losses Matter Beyond Wall Street
Meta’s $77 billion loss, accumulated since 2021, is often framed as a risky but legitimate business bet gone wrong. Baker challenges this view by focusing on opportunity cost what society could have gained if those resources had been deployed elsewhere.
Thousands of highly skilled software engineers, designers, project managers, and researchers were dedicated to the Metaverse for years. Baker argues this talent could have instead driven progress in medical research, climate technology, public infrastructure, or productivity-enhancing software. In an economy already struggling with labor shortages in critical sectors, this diversion of expertise carries a real social cost.
Physical Resources and Community Impact
Beyond human capital, Baker highlights the physical resources consumed by Meta’s Metaverse push. Massive office expansions, data centers, high-performance computing equipment, and enormous electricity usage all required materials and energy that are inherently limited.
He offers a pointed example: construction materials and labor used for Meta’s expansion in the San Francisco Bay Area one of the most expensive housing markets in the U.S. could have been redirected toward affordable housing projects, easing a long-standing regional crisis.
A Warning Sign for the AI Boom
Baker’s critique also serves as a cautionary tale for the current AI investment frenzy. Major tech companies are now pouring hundreds of billions of dollars into artificial intelligence infrastructure, placing increasing strain on power grids and complicating climate targets.
He questions whether AI could repeat the Metaverse pattern: enormous capital outlays, massive talent concentration, and uncertain long-term social returns. If AI fails to deliver proportional productivity gains, Baker warns, the economy could once again suffer from misallocated resources.
Meta’s Pivot and the Bigger Question
Meta has reportedly cut its Metaverse budget by 30% for 2026, shifting focus toward AI. While some see this as a sign of fiscal discipline, Baker asks whether this is genuine learning or simply the same cycle of waste under a new technological banner.
The Bigger Takeaway
Baker’s central message is clear: in a world of scarce resources, billionaire-led tech experiments aren’t isolated corporate gambles. When human talent, capital, and energy are locked into projects that fail to deliver social value, everyone pays the price. The real loss isn’t just $77 billion it’s the lost potential of what those resources could have built instead.
