What I read before is that the plan was for facebook to introduce cheap instance hosting at the expense of making it a "franchise" they can control, monetize, monitor...somewhere between a self-hosted instance and a reddit sub.
Additionally: While spez’s reasoning isn’t sound on the matter, it IS true, that user generated content is highly valuable to AI firms. With ChatGPT out the door, we shouldn’t expect anything to be written after a date a few years back to be written by a human. But this means these data sources aren’t “clear” from generating a feedback loop: If every conversation is potentially three chat bots in a trenchcoat the fourth chat bot learning from that could be of a reduced quality. Therefore every AI firm (of which Facebook is regrettably one) needs to think about how to farm user generated content. I don’t think Zuck wants to be in the cloud business of hosting instances, at least not primarily. On the one hand he is a reliable business partner for regimes all around the world and “moderating” federated instances is a way to keep this business, on the other hand this will help Facebook to gain access to user generated conversation, and more important: potentially block competitor’s access in the future.
I don't pay much attention to Zuck but listening to him talk doesn't give me confidence that this guy knows what to do next in the social media space. Meta erae has pretty much been an abject failure and Facebook feels like an old mall no one goes to anymore. Even IG seems to have lost its luster a bit.