Meta stock falls as reports suggest its Avocado AI model underperforms competitors, release delayed

Investing.com - Meta’s stock price declined in pre-market trading on Friday after The New York Times reported that the company’s latest AI model performed poorly in comparison with leading systems from competitors, causing a delay in its planned release.

As of 06:11 AM Eastern Time, the stock was down about 1%.

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The report states that Meta’s new foundational AI model, codenamed Avocado, underperformed in internal testing against competing models from Google, OpenAI, and Anthropic. According to insiders cited by the paper, the model lagged behind peers in tasks involving reasoning, coding, and writing.

Meta CEO Mark Zuckerberg previously said that the company’s next-generation AI model would “drive frontier development over the next year or so,” as the social media giant increases spending to compete in the rapidly evolving AI race.

The report notes that although the Avocado model outperformed Meta’s earlier systems and surpassed Google’s Gemini 2.5 model released in March, it did not reach the performance level of Gemini 3.0, which debuted in November.

According to The New York Times, Meta has postponed the release of the new model from its initial early-month target to at least May. The report adds that the leadership of Meta’s AI division has also discussed temporarily licensing Google’s Gemini model to support some of the company’s AI products, though no final decision has been made.

After its previous generation model, Llama 4, failed to meet expectations last year, Meta has been heavily investing to strengthen its position in AI. In June, the company invested $14.3 billion in startup Scale AI and appointed its CEO, Alexandr Wang, as Meta’s new Chief AI Officer.

Wang helped establish a new research team within the company called TBD Lab, which has been developing two new AI systems—Avocado and Mango, the latter being an image and video generation model.

The report states that the team completed the “pre-training” phase of Avocado at the end of last year and began “post-training” in January, with an initial goal of launching in mid-March. So far, the team has released a product called Vibes, an AI video app similar to OpenAI’s Sora.

Meta executives have also debated whether the new AI system should be open-source or closed. The company has traditionally supported open-source models, though Zuckerberg and Wang have recently leaned toward keeping the new models proprietary.

According to The New York Times, TBD Lab currently employs about 100 people and has continued hiring, despite several researchers leaving the team before the release of the Avocado project.

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