Meta shares surge more than 20% after AI assistant Muse debuts

Meta stock surged more than 11% on Monday.

Trading volumes in Meta stock surged, with shares up over 20% since the details of the AI assistant were released.

Muse is a personal AI agent capable of sending emails, booking travel, filling out forms and making purchases on a user's behalf; it runs on a dedicated virtual machine in Meta's cloud, is powered by Muse Spark, and is accessible through a standalone iOS and Android app, via the web at muse.ai, or through WhatsApp.

Muse carries no ads, though Chief AI Officer Alexandr Wang has said Meta is exploring commerce-related avenues as a potential source of future revenue.

The Nasdaq hit a fresh record high on Monday, driven by a rally in Meta shares, which logged their best day in more than a year.

The Roundhill Magnificent Seven ETF hit a record level for the second straight session.

"I think up to this point most of the agentic use cases have not really been for normal people," Bernstein analyst Stacy Rasgon told CNBC in a "Squawk on the Street" interview on Monday.

"They care about security, I don't know how much they care about privacy," Rasgon said, referring to whether the personal data-hungry Muse app will sting Meta in the long run.

Internal testing revealed that the agent bypassed safety guardrails in at least one case, surfacing a user's iCloud photos after being asked to identify toys in birthday party pictures, according to Reuters.

Testers flagged instances where the agent stalled mid-task without indicating a problem had occurred, according to Reuters, and Meta's chief technology officer Andrew Bosworth noted in an internal post that he was repeatedly logged out of the service.

The AI agent market was popularized earlier this year among developers and technology enthusiasts by the freely available OpenClaw tool.

Other AI services have experienced similar boom times upon their release but failed to remain blockbusters, such as OpenAI's Sora and Meta's Vibes AI video tool, which helped bolster downloads of the Meta AI app when it was first released last September.

Vishal Shah, Meta's vice president of AI products, said the company had delayed an earlier April release to improve the product's security: "It is impossible to say that there is never going to be a mistake, but every single part of the architecture has been designed to make this as safe, as secure, as private as we can possibly make it."

Meta said it plans to release an encrypted version of Muse before year's end, in which not even the company would have access to a user's data or conversations.

730,000 downloads over about five days is roughly 146,000 downloads a day.

If all 730,000 installs paid the $20 monthly tier with no churn, that is $14.6 million a month, or about $175 million a year.

At $175.2 million a year, the roughly $17 billion attorneys general settlement would take about 97 years to cover.

With a cumulative gain of more than 20% and more than 11% of it on Monday, about eight percentage points of the move came in earlier sessions.

Meta's Muse agent overtook ChatGPT as the leading iOS free app on Friday, with over 730,000 downloads in the last five days.

The Muse app overtook ChatGPT as the leading iOS free app in the U.S. on Friday, and racked up 730,000 downloads over about five days after it launched on Sep. 8, according to the analytics firm Sensor Tower.

Sensor Tower said Muse's cumulative downloads topped ChatGPT, Claude and Grok during the same post-launch window, and noted that the apps had staggered platform releases split between Apple and Google Play, which would impact their totals.

Meta recently agreed to pay roughly $17 billion to settle with a coalition of state attorneys general that had sued the company for misrepresenting alleged harms to children and teenagers caused by apps like Facebook and Instagram.