Meta Delays Next-Gen AI Model "Avocado" to May: Performance Falls Short of Rivals, Considers Licensing Google Gemini — $135B AI Bet Under Scrutiny
Category: Industry Trends
Excerpt:
Meta Platforms has delayed the release of its next-generation AI model codenamed "Avocado" from March to at least May 2026, after internal testing revealed the model's performance falls short of leading competitors including OpenAI's GPT, Anthropic's Claude, and Google's latest Gemini models. The New York Times first reported that Meta's AI division leaders are now considering temporarily licensing Google's Gemini to power Meta's AI products. The delay comes as Meta plans to invest up to $135 billion in AI infrastructure in 2026 and reportedly considers layoffs of 20% or more of its workforce to fund aggressive AI spending.
Menlo Park, California — Meta Platforms has delayed the release of its next-generation AI model codenamed "Avocado" from March to at least May 2026, according to a report by The New York Times on March 12. Internal testing revealed that the model's performance falls short of leading competitors, prompting Meta's AI division leaders to consider temporarily licensing Google's Gemini to power Meta's AI products. The delay puts Meta's ambitious $135 billion AI investment plan under intense scrutiny as the company races to catch up with OpenAI, Anthropic, and Google in the foundation model race.
📌 Key Highlights at a Glance
- Model Name: "Avocado" (codename) — Meta's next-generation foundation model
- Original Release: March 2026
- Delayed Release: At least May 2026 (possibly later)
- Delay Reason: Performance falls short of leading competitors in internal benchmarks
- Performance vs Rivals: Trails OpenAI GPT, Anthropic Claude, Google Gemini 3
- Performance vs Previous: Better than Meta's Llama 4 and Google's Gemini 2.5
- Potential Remedy: Considering licensing Google Gemini temporarily
- 2026 AI Investment: Up to $135 billion capital expenditure
- Workforce Impact: Potential layoffs of 20%+ (15,000+ employees)
- Stock Impact: Shares rose 3% on layoff news; pressure from AI delay concerns
- First Reported: The New York Times, March 12, 2026
🥑 Delay Details: What Happened to Avocado
Meta's next-generation AI model with the codename "Avocado" has been in development for months, representing the company's bid to catch up with—and potentially surpass—leading AI models from OpenAI, Anthropic, and Google. The model was originally scheduled for release in March 2026, but has now been pushed back to at least May, and potentially later, according to people familiar with the matter.
Avocado Development Timeline
| Timeline | Event | Status |
|---|---|---|
| 2025 | Development begins | Completed |
| Early 2026 | Internal testing begins | Completed |
| March 2026 (Original) | Planned release | ❌ Delayed |
| May 2026+ (Revised) | New target release | ⏳ Pending |
"Meta has postponed the release of its artificial intelligence model 'Avocado' to at least May, from this month, the New York Times reported on Wednesday, citing people familiar with the matter."
— Reuters, March 12, 2026
Why the Delay?
According to the New York Times report, the delay stems from performance concerns identified during internal testing. Specifically:
- Benchmark Underperformance: Avocado trails leading models from OpenAI, Anthropic, and Google on key benchmarks
- Quality Gaps: Internal evaluations found performance gaps that Meta leadership deemed unacceptable for release
- Competitive Pressure: Rapid advances from competitors have raised the bar for what constitutes a competitive model
- Reputational Risk: Releasing an underperforming model could damage Meta's credibility in the AI race
📊 Performance Analysis: How Avocado Compares
While the specific benchmark scores have not been publicly disclosed, reports indicate a nuanced performance picture for Avocado. The model shows improvement over Meta's previous offerings but still lags behind the absolute leaders in the field.
Avocado Performance Summary
Better Than Llama 4
Avocado outperforms Meta's previous generation Llama 4 model, showing internal progress
Better Than Gemini 2.5
The model performed better than Google's Gemini 2.5 from March in some tests
Trails Gemini 3
Avocado underperforms compared to Google's latest Gemini 3 model
Trails GPT-5.x & Claude
The model lags behind OpenAI GPT-5.x and Anthropic Claude's latest versions
Competitive Position Analysis
| Model | Company | Market Position | Key Strength |
|---|---|---|---|
| GPT-5.x Series | OpenAI | 🥇 Leader | Professional workflows, computer use |
| Claude Opus 4.6 | Anthropic | 🥈 Challenger | Coding, safety, long reasoning |
| Gemini 3 | 🥉 Challenger | Context window, ecosystem | |
| Avocado | Meta | ⏳ Delayed | Potential open-source advantage |
| GLM-5-Turbo | Zhipu AI | Regional Leader | Agent optimization, Chinese market |
"The model, code-named Avocado, outperformed Meta's previous A.I. model and did better than Google's Gemini 2.5 model from March, two of the people said. But it still fell short of the performance of the latest systems from OpenAI, Anthropic and Google."
— The New York Times, March 12, 2026
🔮 The Gemini Option: Considering Google Licensing
In a surprising twist, Meta's AI division leaders have reportedly discussed temporarily licensing Google's Gemini to power Meta's AI products while Avocado continues development. This consideration highlights both the urgency of Meta's AI needs and the challenges it faces in catching up with competitors.
Potential Licensing Scenarios
🔄 Temporary Bridge Solution
License Gemini to power Meta AI features while continuing Avocado development. This would ensure Meta's products remain competitive during the delay period.
📱 Product Integration
Gemini could power AI features across Meta's ecosystem: Facebook, Instagram, WhatsApp, and Ray-Ban Meta smart glasses.
💰 Cost-Benefit Trade-off
Licensing fees to Google vs. the cost of further delaying competitive AI features. Meta must weigh the strategic implications of depending on a rival.
⚠️ Reputation Impact
After investing billions in AI, licensing from a competitor could signal strategic weakness to investors and the market.
Strategic Implications
The mere consideration of licensing Gemini reveals the pressure Meta faces. After spending an estimated $14 billion to build an AI "super team" and planning up to $135 billion in 2026 capital expenditure, the possibility of depending on a rival's technology represents a significant strategic pivot—or admission of challenges.
"Even more stunning, Meta's leadership has apparently discussed licensing Gemini from Google on a temporary basis until Avocado is up to snuff."
— Fortune, March 13, 2026
💰 $135B Investment: Meta's AI Spending Spree
Meta has committed to an unprecedented level of AI investment, with capital expenditure plans of $115-135 billion for 2026 alone—nearly double the $72 billion spent in 2025. This massive investment underscores both the opportunity and the pressure Meta faces in the AI race.
2026 AI Investment Breakdown
Total planned capital expenditure for 2026
Increase from 2025's $72 billion capex
Nvidia H100 GPUs planned for AI infrastructure
Estimated investment in AI talent and acquisitions
Where the Money Goes
- Data Centers: Massive expansion of AI-optimized computing infrastructure
- Custom Chips: Development of Meta's own AI chips (MTIA series) to reduce dependence on Nvidia
- Talent: Aggressive hiring and acquisitions to build world-class AI team
- Energy: Power infrastructure to support energy-intensive AI computing
- Research: Fundamental AI research through FAIR (Fundamental AI Research)
Investor Concerns
The Avocado delay raises questions about whether Meta's massive investment is yielding competitive results. Investors are increasingly scrutinizing:
- Return on AI investment relative to competitors
- Timeline to competitive parity with OpenAI and Anthropic
- Monetization path for AI features
- Opportunity cost of AI spending vs. other priorities
📋 Layoff Plans: 20% Workforce Reduction
In a development that sent Meta shares higher, Reuters reported that Meta is planning layoffs of 20% or more of its workforce—potentially affecting over 15,000 employees. The workforce reduction appears tied to funding Meta's aggressive AI investments.
Layoff Overview
| Metric | Details |
|---|---|
| Percentage | 20%+ of global workforce |
| Employees Affected | 15,000-16,000+ |
| Current Workforce | ~75,000+ globally |
| Stated Purpose | Fund AI investments, reduce costs |
| Stock Reaction | +3% on layoff news |
| Historical Context | Would be Meta's largest-ever layoff round |
Context: AI vs. Headcount Trade-off
The planned layoffs represent a stark trade-off: Meta is choosing to invest in AI infrastructure and technology at the expense of human capital. This pattern mirrors broader tech industry trends, where companies are reallocating resources from traditional roles to AI development. The 20% figure would make this Meta's largest layoff round in company history, surpassing previous cuts in 2023.
"Meta Platforms shares rose nearly 3% on Monday after a Reuters report that the social media giant plans to lay off 20% or more of its workforce."
— The Hindu, March 17, 2026
⚔️ Competitive Context: The AI Model Wars
Meta's Avocado delay occurs against the backdrop of an intensifying AI model competition. While Meta has struggled to reach the top tier, competitors have accelerated their lead.
Competitor Status — March 2026
OpenAI
Status: 🥇 Leader
Released GPT-5.4 in March with 83% GDPval, native computer use. $110B funding round. Valuation: $730-840B.
Anthropic
Status: 🥈 Challenger
Claude Opus 4.6 with Claude Cowork. $30B funding at $380B valuation. Strong in coding and safety.
Status: 🥉 Challenger
Gemini 3 with 2M context. Deep Google Workspace integration. Now potential licensing partner for Meta.
Meta
Status: ⚠️ Delayed
Avocado delayed to May+. Considering Gemini licensing. Massive $135B investment planned.
💡 Industry Implications and Analysis
🎯 The Bar Keeps Rising
The Avocado delay illustrates how quickly the AI model bar is rising. What would have been competitive months ago is now insufficient. This dynamic puts continuous pressure on all players to accelerate development cycles and push model capabilities.
🤝 Unusual Competitor Collaboration
Meta considering Gemini licensing represents an unusual potential collaboration between fierce competitors. If pursued, it could signal a new dynamic in the AI race—where even rivals may need to cooperate in certain areas while competing in others.
💼 Investment Scrutiny Intensifies
Meta's $135B investment plan will face increased scrutiny. Investors are asking: if billions spent haven't yielded competitive models, what will change? The pressure to demonstrate ROI on AI spending will intensify across the industry.
👷 Human Cost of AI Investment
The planned 20% layoffs highlight a troubling dimension of the AI race: massive investment in AI often comes at the cost of human workers. This pattern may continue as companies reallocate resources from traditional roles to AI development.
📊 Open Source Strategy Questioned
Meta's open-source approach with Llama has been praised for democratizing AI, but the Avocado struggles raise questions about whether this strategy has limited Meta's ability to build proprietary competitive advantages.
⏱️ Timeline Risks for All Players
If Meta—with its resources and talent—struggles to hit release timelines and performance targets, it suggests timeline risks exist for all players. The complexity of building frontier models may be underestimated.
❓ Frequently Asked Questions
What is Meta's Avocado AI model?
Avocado is Meta's codename for its next-generation foundation AI model, designed to compete with leading models from OpenAI (GPT), Anthropic (Claude), and Google (Gemini). The model has been in development for months and was originally scheduled for release in March 2026.
Why was Avocado delayed?
According to reports, Avocado was delayed because internal testing showed the model's performance fell short of leading competitors including OpenAI's GPT-5.x, Anthropic's Claude, and Google's latest Gemini models. While Avocado outperformed Meta's previous Llama 4 and Google's Gemini 2.5, it trails the absolute leaders in key benchmarks.
Is Meta considering licensing Google Gemini?
According to The New York Times, leaders of Meta's AI division have discussed temporarily licensing Google's Gemini to power Meta's AI products while Avocado continues development. This would be an unusual collaboration between fierce competitors.
How much is Meta investing in AI in 2026?
Meta plans capital expenditure of $115-135 billion in 2026, nearly double the $72 billion spent in 2025. This investment covers data centers, custom chips, talent acquisition, and AI research infrastructure.
Is Meta planning layoffs?
According to Reuters, Meta is planning layoffs of 20% or more of its workforce, potentially affecting 15,000-16,000+ employees. If confirmed, this would be Meta's largest-ever layoff round. The cuts appear tied to funding aggressive AI investments.
How does Avocado compare to Llama?
Avocado represents Meta's next generation beyond Llama 4. Reports indicate Avocado outperforms Llama 4 in internal testing, showing progress in Meta's model development. However, both models trail the absolute leaders from OpenAI, Anthropic, and Google's latest Gemini.
🎤 Industry Perspectives
"Meta has postponed the release of its artificial intelligence model 'Avocado' to at least May, from this month, the New York Times reported on Wednesday, citing people familiar with the matter."
— Reuters, March 12, 2026"After spending $14 billion to build an AI super team, will Mark Zuckerberg ask Google for Gemini? Even more stunning, Meta's leadership has apparently discussed licensing Gemini from Google on a temporary basis until Avocado is up to snuff."
— Fortune, March 13, 2026"Meta's Avocado isn't ripe quite yet. The company has reportedly delayed the release of its next-generation foundational model until May, owing to performance issues that have it lagging behind competitors."
— CNET, March 2026👀 What to Watch For
- May Release: Will Avocado launch in May, or face further delays?
- Gemini Licensing Decision: Will Meta proceed with licensing Google's technology?
- Layoff Confirmation: Official announcement of workforce reduction plans
- Stock Impact: How investors respond to Meta's AI strategy execution
- Competitor Response: How OpenAI, Anthropic, and Google react to Meta's challenges
- Open Source Strategy: Whether Meta shifts approach from open-source Llama strategy
- Talent Retention: Impact of layoffs on Meta's AI team capabilities
The Bottom Line
Meta's delay of the Avocado AI model from March to at least May represents a significant setback in the company's race to compete with OpenAI, Anthropic, and Google. The delay reveals the challenges Meta faces despite massive investment—planning up to $135 billion in 2026 capital expenditure and building an AI "super team" at an estimated cost of $14 billion.
The consideration of licensing Google's Gemini underscores the urgency of Meta's situation. After years of pursuing an open-source strategy with Llama, Meta now finds itself potentially depending on a rival's technology—a scenario that would have seemed unlikely just months ago.
The planned 20% workforce reduction adds another dimension to the story: the human cost of AI investment. Meta appears willing to sacrifice thousands of jobs to fund its AI ambitions, betting that the technology will ultimately justify the cost.
For the broader industry, Meta's struggles illustrate the difficulty of building competitive frontier models—even for companies with nearly unlimited resources. The bar keeps rising, and catching up is becoming increasingly challenging for all but the best-funded and most talented teams.
The coming months will be critical: Can Meta deliver a competitive Avocado model? Will it turn to Google for help? And will investors continue to support the massive spending required to compete in the AI race?
Stay tuned to our Industry Trends section for continued coverage of Meta's AI journey.
