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Muse

Meta's Muse weakens on merchant side as DoorDash cites few orders

Sources (5)
  • Bad news: DoorDash's CEO said third-party agents including Muse brought only a few hundred orders, against 993 million total orders in the quarter.
  • Bad news: On 30 Oct S&P cut its outlook on Meta to AA- negative, naming the unclear path to monetising Muse.
  • Mixed: Meta says more than 25% of users shop through Muse, yet merchant-side transactions are almost nil.

What we watchWhen Meta discloses the value of Muse transactions, and how it will charge merchants a fee.

Read the full notes

Two independent signals weaken the Muse thesis at once, and both point to the same gap. User-side numbers look good (more than 10 million set-ups, a quarter using it daily), but there is still no evidence of merchant-side transaction volume or a monetisation timetable.

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(1) DoorDash CEO Tony Xu disclosed that third-party agents including Muse have brought only a few hundred orders in total, against 993 million total orders in the same quarter (up 28% year on year), which is close to zero. Two days ago Amazon's Jassy also said external shopping agents are not good yet, so both companies are keeping the agent entry point for themselves. (2) On 30 Oct S&P cut its outlook on Meta from AA- stable to AA- negative, and its statement named the unclear path to monetising Muse. That squeezes the window in which Meta can issue debt to subsidise a free Muse.

Key evidence

  • DoorDash Q3 earnings call, 29 Oct: CEO Tony Xu said usage of third-party agents (including Muse) is very low, a few hundred orders in total; do not fight the tide or fool yourself; simple tasks such as ordering food are still mostly done in DoorDash's own app. Source: TechCrunch, 30 Oct; the Motley Fool call transcript confirms an analyst named Muse directly
  • By comparison, DoorDash had 993 million total orders in the same quarter (up 28% year on year), so from the merchant side Muse's volume is close to zero
  • DoorDash's approach: building its own Ask DoorDash and Text DoorDash and opening an MCP interface. It also announced a roughly $17 billion acquisition of Instacart (one of the shopping partners named when Muse launched; the deal is pending)
  • Meta disclosed that more than 25% of users shop through Muse, with an average basket above $200 (user side), against almost no transactions on the merchant side
  • On 30 Oct S&P cut its outlook on Meta from AA- stable to AA- negative. Its statement said it is unclear when Muse and the related foundation models will bring in substantial revenue exceeding their rising costs, and that it is less sure than before that Meta will cut capital spending from 2028. Source: CNBC, 30 Oct
  • A Meta spokesperson responded that it disagrees with S&P's view of its ability to monetise AI
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  • Q3 free cash flow was -$2.12 billion. Full-year capital expenditure guidance is $135 billion to $145 billion. Zuckerberg has acknowledged that Muse needs a lot of compute and that most users get it free, with no ads
  • Zuckerberg has said Meta will eventually charge merchants a transaction fee (the monetisation path)
  • Note: 'a few hundred orders' is a rounded spoken figure for all third-party agents combined, and the period covered is unclear

Catalysts to watch

  • When Meta discloses the value of transactions completed through Muse
  • Whether a large merchant (Walmart, Best Buy, or DoorDash as Instacart's new owner) publicly backs Muse with figures
  • How and when Muse starts charging merchants a transaction fee
  • Changes in Meta's borrowing costs after the outlook turned negative
  • How DoorDash handles Instacart's shopping partnership with Muse after the acquisition

Risks

  • Merchant-side transaction volume is close to zero: distribution can build the installed base, but transactions depend on merchants opening their entry points
  • DoorDash and Amazon, two high-frequency use cases, are both keeping the agent entry point for themselves
  • S&P's negative outlook raises the cost of funding capital spending with debt
  • The window for free subsidies is narrowing, so management needs a monetisation path sooner
  • The unclear period covered may overstate or understate actual usage

Sources 5

  1. DoorDash Q3 call, 29 Oct
  2. TechCrunch, 30 Oct
  3. Motley Fool call transcript
  4. S&P statement, 30 Oct
  5. CNBC, 30 Oct

A brief is a lead for our research, not a verified conclusion or advice.