2
trends next year. That said, it’s not clear that the economy has stabilized yet so we’re planning our
budget somewhat more conservatively.
In 2023, we're going to focus our investments on a small number of high priority growth areas. So that
means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next
year. In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller
organization than we are today.
Three of the primary areas we’re going to focus on are our AI discovery engine that’s powering Reels
and other recommendation experiences, our ads and business messaging platforms, and our future
vision for the metaverse. The internal indications I’ve seen suggest we're doing leading work and we’re
on the right track with these investments, so I think we should keep investing heavily in these areas.
As I've shared before, our goal is to grow Family of Apps operating income, such that even with our AI
infrastructure and Reality Labs investments, we can still meaningfully grow our overall company
operating income in the long run. Our current surge in capex is largely due to building out our AI
infrastructure and we would expect capex to come down as a percent of revenue over the long term.
We expect Reality Labs expenses will increase meaningfully again in 2023, with the biggest drivers of
that being the launch of the next generation of our consumer Quest headset and hiring that's been done
in 2022 but for which we'll be paying the first full year of salaries next year. More broadly, beyond 2023,
we expect to pace Reality Labs investments to ensure that we can achieve our goal of growing overall
company operating income. Our capital allocation philosophy over the long term is to allocate a portion
of the profits generated from the Family of Apps towards these future focused areas while enabling
greater return of capital to shareholders.
Now, I'd like to share some updates on the progress that we're seeing in these product areas.
Our AI discovery engine is playing an increasingly important role across our products -- especially as
advances enable us to recommend more interesting content from across our networks in feeds that
used to be primarily driven just by the people and accounts you follow.
This of course includes Reels, which continues to grow quickly across our apps -- both in production and
consumption. There are now more than 140 billion Reels plays across Facebook and Instagram each day.
That's a 50% increase from six months ago. Reels is incremental to time spent on our apps. The trends
look good here, and we believe that we're gaining time spent share on competitors like TikTok.
Over time, I expect a few things to set our products apart here. First is that our discovery engine work
allows us to recommend all types of content beyond Reels as well, including photos, text, links,
communities, short and long-form videos, and more. Second is that we can mix this content alongside
posts from your family and friends, which can't be generated by AI alone. Third, as more social
interactions move to messaging, we're developing a flywheel between discovery and messaging that are
going to make these apps stronger. On Instagram alone, people already reshare Reels 1 billion times a
day through DMs.
Moving to monetization, I've discussed in the past how the growth of short-form video creates near-
term challenges since Reels doesn't monetize at the rate of feed or stories yet. That means as Reels
grows, we're displacing revenue from higher-monetizing surfaces. I think this is clearly the right thing to
do so that Reels can grow with the demand we're seeing, but closing this gap is also a high priority. Even