Influential analyst Rich Greenfield expressed uncertainty about the monetization of AI chatbots, despite acknowledging Meta Platforms Inc. (NASDAQ:META) as a key player in the crowded AI space.

What Happened: During “Last Call” CNBC on Wednesday, Greenfield highlighted that Meta’s commitment to AI investments comes at a time when the space has become “crowded” with competition from ChatGPT by Microsoft and OpenAI, Google Gemini, Anthropic, Perplexity.AI and more.

"There is no doubt that $META is going to be a major player. I think the challenge for investors is one, how big is this investment cycle, given the level of competition, " Greenfield said.

He highlighted that while Meta’s investments in their virtual reality unit Reality Labs and their collaboration with Ray-Ban on AR headsets have been huge, these were not as competitive as the AI space.

"It's not so clear right now,” Greenfield said.

“Yes, AI is making your recommendations better and AI is making the ads better, the content on Facebook and Instagram is going to be better. But how you actually monetize an AI chatbot…the use case and the monetization, isn’t clear. It’s really early days," Greenfield said, advising investors to learn more about the same.

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Price Action: Meta’s stock closed at $493.50 on Wednesday, marking a 15.57% decrease from its previous close. The company’s Q1 earnings per share stood at $4.710, surpassing the estimated $4.320.

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