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Meta CEO Mark Zuckerberg. Bloomberg/Getty Images Meta used AI-powered workplace systems to penalize employees for taking medical and parental leave and then selected them for layoffs, according to allegations in a new lawsuit.
The complaint, filed by 26 current and former workers on Monday in federal court in Northern California, alleges that Meta relied on AI-assisted tools and employee-monitoring data to score and rank workers before cutting about 8,000 jobs in May.
The plaintiffs allege that the process relied on metrics such as work output, software development activity, and AI tool usage that employees could not accrue while on protected leave. By failing to adjust those measurements for time away, the suit alleges, Meta effectively recorded medical leave, maternity leave, and disability-related reductions in output as underperformance.
"Meta did not assemble the termination list through the considered judgment of managers who knew the work," the complaint says.
Instead, the employees allege, the company relied on systems including its internal AI chatbot, Metamate; AI usage dashboards; employee-trained "second-brain" agents designed to reproduce parts of a worker's output; activity-monitoring data; and AI-assisted performance and calibration tools.
They allege that Meta ranked employees using internal AI-adoption categories such as "AI Native," "AI First," and "AI Enabled," and that employees' scores declined when they were away from work. The allegations have not been tested in court.
"These claims lack merit and are not based on facts," a Meta spokesperson told Business Insider. "Workforce management and organizational decisions were and are made by people, not AI."
The case comes as Meta has pushed employees to use AI more heavily and tracked adoption through internal dashboards and leaderboards. Other major companies, including Disney, JPMorgan, and Visa, have also begun measuring employee AI usage.
The lawsuit against Meta referenced internal AI programs the company introduced this year. Meta had installed software on many US employees' computers to capture keystrokes and mouse movements as training data for its AI models, prompting employee protests over privacy and the program's mandatory nature, Business Insider reported in April. The lawsuit alleges that data from this monitoring program also helped feed Meta's layoff-selection systems.
Meta paused the program in June after an internal leak made the data widely accessible across the company.
Meta also introduced a performance system called Checkpoint this year, placing greater emphasis on outcomes and giving the company's top-rated workers significantly larger bonuses. The lawsuit alleges that an AI-enabled element of Checkpoint made employee AI adoption a "core assessment metric."
The complaint says several employees were selected for layoffs while on approved leave or shortly after returning from it. One engineer alleged that his manager blamed a lower rating on the "broken time" caused by an injury that prevented him from working. Another employee says a manager warned that taking medically approved leave would lead senior leadership to "definitely" nominate him for layoffs.
The employees are asking a judge to pause their terminations while their claims proceed in arbitration and to order an independent audit of Meta's layoff selection process. They also want Meta to recalculate the selections without counting protected leave or disability accommodations against workers.
The plaintiffs, who have chosen to remain anonymous, worked at Meta across several states, including California, Washington, New York, Illinois, Pennsylvania, and Florida.
Reuters first reported on the lawsuit on Tuesday.
Have a tip? Contact Pranav Dixit via email at [email protected] or Signal at 1-408-905-9124. Use a personal email address and a nonwork device; here's our guide to sharing information securely.
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Pranav Dixit is the Meta Correspondent at Business Insider based in the San Francisco Bay Area. He writes about Meta’s products, policies, and internal workings while examining how the company’s decisions shape how billions of people connect and communicate.Previously, Pranav was the India-based technology correspondent for BuzzFeed News, covering the impact of Silicon Valley’s largest companies on the culture, society, and politics of more than a billion people in South Asia. He has also been a senior news editor at Engadget and ran technology coverage at the Hindustan Times, one of India’s largest national newspapers.Pranav’s reporting has shed light on the human consequences of Big Tech’s quest for growth in emerging markets, and sparked widespread conversations about the impact of American technology companies on the Global South. In 2019, he won Syracuse University’s Mirror Award for a boots-on-the-ground feature about how WhatsApp misinformation sparked gruesome lynchings in rural India. He has also reported from Kashmir, a volatile geopolitical hotspot, documenting the world’s longest-running internet shutdown.His work has been widely cited by major national and international publications, and he has been featured on the BBC, Al Jazeera, and podcasts such as Vox Media’s Land of the Giants to discuss his work. He has also spoken in journalism classes including at UC Berkeley’s graduate journalism program. His writing has appeared in The Guardian, Vox, Time, The Information, and Al Jazeera.Pranav moved to the United States in 2021 from New Delhi, India, to be a fellow at Harvard University’s Nieman Foundation for Journalism, where he studied the evolution of the American tech press and ways newsrooms around the world can cover technology and society more effectively.Got a tip about Meta or anything else in Silicon Valley? Contact Pranav via encrypted messaging app Signal (+1408-905-9124), or email him at [email protected] or [email protected]. You can also reach him on WhatsApp at +857-753-3949 or DM him on X (@PranavDixit) or BlueSky (@pranavdixit.bsky.social).Pranav keeps sources anonymous. Please use a non-work device to reach out.Expertise: Meta, Facebook, WhatsApp, Llama, AI, Threads, Instagram, Mark Zuckerberg, social media, platforms, immigration
, /PRNewswire/ -- Meta Platforms, Inc. (NASDAQ: META) announced today that the company's second quarter 2026 financial results will be released after market close on Wednesday, July 29th, 2026.
Meta will host a conference call to discuss its results at 1:30 p.m. PT / 4:30 p.m. ET the same day. The live webcast of the call can be accessed at the Meta Investor Relations website at investor.atmeta.com, along with the company's earnings press release, financial tables, and slide presentation.
Following the call, a replay will be available at the same website. Transcripts of conference calls with publishing equity research analysts held on July 29th, 2026 will also be posted to the investor.atmeta.com website.
Disclosure Information
Meta uses the investor.atmeta.com and meta.com/news websites as well as Mark Zuckerberg's Facebook profile (facebook.com/zuck), Instagram account (instagram.com/zuck) and Threads profile (threads.net/zuck) as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
About Meta
Meta is building the future of human connection, powered by artificial intelligence and immersive technologies. When Facebook launched in 2004, it changed the way people connect. Apps like Messenger, Instagram, and WhatsApp further empowered billions around the world. Now, Meta is moving beyond 2D screens toward experiences that foster deeper connections and unlock new possibilities.
Contacts
Investors:
Chad Heaton
[email protected] / investor.atmeta.com
Meta is facing a lawsuit from 26 employees accusing the tech giant of using AI-powered software that disproportionately selected workers with disabilities and those who took medical leave to be impacted in a round of layoffs earlier this year.
The company allegedly used an internal bot known as “Metamate;” “second-brain” agents that were trained by workers; AI-usage dashboards; and keystroke and computer activity data to root out unproductive workers, according to the suit filed Monday in Oakland, Calif., federal court.
But this tech failed to account for workers who were out on valid medical leave – and “in effect penalized the employees for exercising their legal rights to these leaves,” according to the suit.
Mark Zuckerberg’s Meta is being sued for allegedly using discriminatory AI systems in its layoffs this year. AP Photo/Alex Brandon A Meta spokesperson denied the claims in the suit, saying they lack merit.
“Workforce management and organizational decisions were and are made by people, not AI,” a Meta spokesperson told The Post.
Reuters earlier reported the case.
It’s seemingly the first lawsuit targeting a major company for allegedly using AI in carrying out layoffs.
In May, Mark Zuckerberg’s Meta kicked off a bloodbath round of 8,000 job cuts – nearly 10% of its global workforce and among the largest layoff rounds in its history – as it ramped up its AI investment plans. Another 7,000 staffers were also reassigned to AI-focused roles.
The 26 plaintiffs – a group of anonymous Meta managers, engineers, scientists and researchers from California, New York and Washington, DC – are asking the court to block Meta from completing the layoffs while they arbitrate their workplace disputes individually.
The suit alleged Meta ranked employees on a termination list using data from keystrokes, screen content, emails and browser history – effectively tanking the ratings for employees who had been out on leave and logging fewer hours.
Meta’s layoff practices violated federal and state laws that ban discrimination or retaliation against workers with disabilities and those who take medical leave or are pregnant, according to the suit.
Meta denied the claims in the lawsuit. Askar – stock.adobe.com Plaintiffs also alleged Meta did not test its AI systems for bias, which would violate new legislation in California and New York City.
In the spring, Meta leadership said the layoffs were an attempt to boost the firm’s efficiency as it ramped up spending on artificial intelligence.
So far this year, nearly a third of all job cuts have hit the tech sector – and AI came in as the leading reason for announced layoffs in June for the fourth month in a row, Challenger, Gray & Christmas said in a report earlier this month.
Meta has said it plans to spend $125 billion to $145 billion this year alone on AI infrastructure, including power-hungry data centers – and the chips needed to power them.
A huge boost in demand has caused severe memory-chip shortages, sending costs skyrocketing. Tech giants like Apple and Xbox have hiked prices on their gadgets, blaming the higher component costs.
In the meantime, investors have grown concerned that huge spending on AI might not result in blowout earnings – creating an “AI bubble” akin to the “dot-com bubble” of the early 2000s.
A coalition of current and former Meta employees have sued the social media giant, alleging that the company used artificial intelligence in its latest round of layoffs in a way that was discriminatory.
In a lawsuit filed Monday, plaintiffs allege that Meta violated various protected-leave laws and discrimination acts related to pregnancies and disabilities, among others, and said they wish to pursue their claims individually in arbitration.
Attorneys representing the 26 unnamed workers said in a legal complaint filed in the United States Northern District Court of California that the plaintiffs were among the 10% of Meta's workforce cut in the company's May layoff round.
The plaintiffs allege that Meta's "constellation of internal artificial-intelligence systems" failed to take approved absences into account when determining which employees to cut.
"Those tools draw on inputs—performance ratings, calibration scores, productivity and output metrics, 'AI-native' ratings, and AI-token consumption—that, by design, cannot be accumulated by an employee who is on protected medical or family leave, or whose output is reduced by a disability," the lawyers wrote in the filing.
The lawsuit accuses Meta of using metrics such as token consumption, which has become a proxy for general AI usage, in a way that targeted certain employees.
Courthouse News Service previously reported the lawsuit.
Read more CNBC tech newsBurnout, frustration and heartbreak: Amazon layoffs take their toll in saturated job marketMeta's Louisiana data center investment to reach $50 billion, aided by generous tax incentivesEurope's Anduril rival Helsing raises $1.8 billion at $18 billion valuationElon Musk and Sam Altman spar on X after Apple files OpenAI lawsuitA Meta spokesperson told CNBC in an email that the "claims lack merit and are not based on facts."
"Workforce management and organizational decisions were and are made by people, not AI," the Meta spokesperson said in the statement.
The lawsuit underscores the rising anxiety about AI's impact on jobs and people with disabilities in the workforce.
The plaintiffs are asking the court to issue a "preliminary injunction maintaining the status quo of their employment" at Meta, "pending an independent audit of the algorithmically assisted selection process and resolution of the merits of their claims in arbitration."
The lawsuit comes nearly a month after a federal judge in California ruled against tech firm Workday in a separate employee-related lawsuit involving the use of AI for hiring decisions. In that case, the judge ruled that Workday must face claims about the company's use of AI-powered job screening services that allegedly violated state and federal laws pertaining to employee discrimination.
Workday denied the allegations and said in a statement at the time that the AI recruiting software doesn't conduct hiring decisions "in California or anywhere else."
"Our technology looks only at job qualifications, not protected traits like race, age, or disability," Workday said in the statement. "We rigorously test our products as part of our Responsible AI program to confirm our tools do not harm protected groups."
WATCH: Meta rebound should continue through July, says 3Fourteen's Warren Pies
Item 1 of 2 A woman walks by the Meta Lab in Los Angeles, California, U.S., May 20, 2026. REUTERS/Daniel Cole
[1/2]A woman walks by the Meta Lab in Los Angeles, California, U.S., May 20, 2026. REUTERS/Daniel Cole Purchase Licensing Rights, opens new tab
SummaryCompaniesThe 26 plaintiffs seek a court order blocking layoffs set to start on July 22Meta said the claims lack merit and people made workforce decisions, not AILawsuit says Meta used productivity scores and AI token usage in layoff selectionsJuly 14 (Reuters) - Twenty-six employees of Meta Platforms (META.O), opens new tab have filed a novel lawsuit accusing the tech giant of using AI-powered software that disproportionately targeted people with disabilities or who took medical leave in selecting workers for mass layoffs.
The lawsuit, filed in Oakland, California, federal court late Monday, says that the company relied on factors such as productivity and AI token usage when it slashed thousands of jobs earlier this year, disadvantaging people who missed work because of medical conditions or to care for family members.
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The plaintiffs, who were notified in May that their jobs would be eliminated starting on July 22, are seeking a preliminary ruling from the court blocking Meta from completing the layoffs while they pursue their claims in private arbitration. The workers say Meta's agreements require employees to arbitrate workplace disputes individually, but do not apply to requests for temporary relief.
A Meta spokesperson on Tuesday said the claims lack merit.
"Workforce management and organizational decisions were and are made by people, not AI," the spokesperson said.
The lawsuit appears to be the first against a major U.S. company to challenge the alleged use of AI in conducting layoffs.
Meta laid off 10% of its global workforce in May, or nearly 8,000 people, and was planning more job cuts later this year, Reuters had reported. CEO Mark Zuckerberg has since said that he does not expect any more company-wide layoffs this year.
The changes are part of a far-reaching overhaul as the company increases its AI investments and centers AI agents in both its product offerings and its approach to work internally.
The 26 plaintiffs, who filed the lawsuit anonymously, are accusing Meta of violating federal and state laws that ban discrimination or retaliation against workers who have disabilities, take medical leave or are pregnant. They also claim that Meta failed to test its AI systems for bias in violation of recently adopted California and New York City laws.
The plaintiffs come from six states, including California and New York, and the District of Columbia.
According to the complaint, Meta used a number of internal AI-assisted systems to score and rank employees on a termination list. Those included "Metamate," a large language model assistant; an employee-trained "second brain" that tracked workers' communications and documents; and a productivity score drawn from scanning keystrokes, screen content, emails and browser history, according to the lawsuit.
Reporting by Daniel Wiessner in Albany, New York; Editing by Chizu Nomiyama, Alexia Garamfalvi and Mark Porter
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Dan Wiessner (@danwiessner) reports on labor and employment and immigration law, including litigation and policy making. He can be reached at [email protected].
Neocloud companies CoreWeave (CRWV 3.89%) and Nebius (NBIS 6.17%) each have major deals with Meta Platforms (META +0.11%). While the social media giant is still building out its own data center footprint, it has also secured leases with CoreWeave and Nebius to gain access to additional computing power in the meantime. It's doing this to give itself the best shot at developing an artificial intelligence model that can rival those produced by the other AI hyperscalers.
However, recent news suggests that Meta's approach could be changing, and that possibility ignited a sell-off in Nebius and CoreWeave's stocks. CoreWeave is now down by 35% from its 2026 high, and Nebius is down by nearly 25%. So, what caused these stocks to crater? Word that Meta plans to launch its own cloud computing service.
Image source: Getty Images.
The worrisome reason Meta is launching a cloud platform Of the big four AI hyperscalers, Meta Platforms is the only one without a cloud computing platform. The basics of the cloud business are straightforward: Owners build out excess computing capacity and then rent that computing power to various clients. That business model has become even more vital during the AI boom. Few companies have the resources necessary to build AI data centers, as they're incredibly expensive.
The market has been fairly patient with the big three cloud computing providers' build-out plans because investors can see how those investments will directly translate into revenue growth. However, Meta has been using all of its computing capacity on internal efforts that don't produce returns on investment that are as easily measurable. Because of this, the market has always been more skeptical about Meta's enormous capex budgets.
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Creating a cloud computing business has never been a top priority for CEO Mark Zuckerberg, and he stated that the company would consider forming one only if it had excess computing capacity that it wasn't using for internal needs. As of early June, he claimed Meta did not have that spare capacity. However, recent reports allege that Meta is taking steps to form a cloud computing business, which could transform how the market views the stock.
But it also raises questions about the future of Nebius and CoreWeave.
Does Meta need the neoclouds' computing capacity anymore? Earlier this year, Nebius announced a five-year partnership under which it will provide $12 billion in dedicated capacity to Meta Platforms. The deal also included the possibility of it leasing another $15 billion in computing capacity from clusters that Nebius has not yet brought online. That's a huge deal for a company of Nebius' size, and it was a big reason why the stock has rallied this year. CoreWeave signed a similar $14 billion deal with Meta last year.
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The reason Meta inked those deals was to gain access to as much computing capacity as possible, as quickly as possible. If it concludes that it actually has too much computing capacity, but decides that it doesn't want to build a cloud computing business, then Meta could cut ties with these two neoclouds and potentially regain the resources it needs for its AI demands. However, I doubt that will happen.
The reality is that AI computing capacity is supply-constrained right now, and having the right to more of it is a bigger advantage. Plus, if Meta's personal superintelligence AI model eventually becomes a hit and is tied into its AI glasses, the company could need a lot of the AI computing power it has already contracted for. Just because Meta has more computing capacity than it needs right now doesn't mean it won't need all of it in the future.
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Because of that, I think CoreWeave and Nebius are still OK investments; they're just a little less safe than they were a few months ago. These two are booming cloud businesses, and even if Meta backs out of its deals with them, they will likely be able to find customers who do want that computing capacity.
In a recent interview, Instagram head Adam Mosseri said he can see a time in the future, perhaps only a year or two, when putting limits on Meta employees’ AI token spend will become necessary.
“I think that you can imagine, at least in a year or two … that the burn rate of a strong engineer might be the same as their salary, or their cost of employment. And in that world, you’re going to probably need to put in some caps,” the Meta executive said, while speaking on Lenny’s Podcast.
AI token spend, a reference to the cost of processing AI prompts and responses, has been a much-buzzed-about subject in recent days. Meta shut down an internal AI token spend leaderboard after AI costs put the company on track for billions of dollars in 2026.
Meta is not alone in rethinking its approach to AI experimentation. Uber also had an AI reckoning after it blew through its 2026 AI coding budget by April. Soaring token costs saw Microsoft cancel Claude Code licenses, consolidating its engineers around its own Copilot CLI tool instead.
Mosseri’s belief, he explained, is that AI token costs will have to be managed just like any other resource, offering an analogy to things like payroll or operating expenditure (OpEx), which is the day-to-day costs of running a business.
“I think of it like…any other resource,” Mosseri said. “I have to decide how to deploy capacity to my different teams because I have a limited number of GPUs and CPUs and storage and RAM etc. I have to decide how to deploy OpEx for labeling budgets across my teams. I have to decide how to deploy payroll for headcount across my teams.”
Token budgets will be the same, he added, noting that the cap per engineer would have to be proportional to the company’s trust in their ability to use the budget in an “ROI-positive” way.
Meta doesn’t currently have token caps for any employee, Mosseri said, but he believes that their use could be healthy in the future. Further down the road, he expects token costs to come down as the AI model makers enter a pricing war to attract people to use their tools over their competitors.
For now, the company has managed to rein in its token costs a bit by shutting down the “silly things” that it was doing, Mosseri noted — like that token spend leaderboard.
“It’s not that hard to build a token incinerator, and that doesn’t create a lot of value,” he said.
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Sarah has worked as a reporter for TechCrunch since August 2011. She joined the company after having previously spent over three years at ReadWriteWeb. Prior to her work as a reporter, Sarah worked in I.T. across a number of industries, including banking, retail and software.
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My answer to the title: not yet, and maybe never the way bulls hope. Selling compute is unlikely to match the roughly 52% operating margin of Meta's Family of Apps. Two things flipped it in July: a Bloomberg report on a Meta cloud business, and a paid model API. Suddenly, the capex looked rentable, not dead money. What I need on the 29th of July is proof that Meta Compute actually exists. Named customers would be very welcome.
Meta Platforms (META - Free Report) closed at $656.73 in the latest trading session, marking a -1.86% move from the prior day. The stock fell short of the S&P 500, which registered a loss of 0.79% for the day. Elsewhere, the Dow saw a downswing of 0.26%, while the tech-heavy Nasdaq depreciated by 1.55%.
The social media company's stock has climbed by 18.03% in the past month, exceeding the Computer and Technology sector's gain of 3.44% and the S&P 500's gain of 4.28%.
The investment community will be paying close attention to the earnings performance of Meta Platforms in its upcoming release. It is anticipated that the company will report an EPS of $7.09, marking a 0.7% fall compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $60.2 billion, reflecting a 26.69% rise from the equivalent quarter last year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $33.05 per share and a revenue of $253.41 billion, signifying shifts of +40.7% and +26.09%, respectively, from the last year.
Any recent changes to analyst estimates for Meta Platforms should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.36% higher. Meta Platforms currently has a Zacks Rank of #3 (Hold).
From a valuation perspective, Meta Platforms is currently exchanging hands at a Forward P/E ratio of 20.25. This expresses a premium compared to the average Forward P/E of 19.66 of its industry.
Investors should also note that META has a PEG ratio of 1.05 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. Internet - Software stocks are, on average, holding a PEG ratio of 1.07 based on yesterday's closing prices.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 104, which puts it in the top 43% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
A fisheye view of thousands of servers at Facebook’s data center in Luleå, Sweden, in 2013. The facility illustrates the scale of Meta’s infrastructure but is separate from its $50 billion Louisiana expansion.
AFP via Getty Images
On July 13, Meta said it would put more than $50 billion into a single Louisiana data center, more than doubling its planned capacity to 5 gigawatts. Twelve days earlier, Bloomberg reported that the same company was developing plans to sell its "excess" AI computing capacity to outsiders. Read those two headlines together and something doesn’t add up. One of the largest buyers of compute on earth is telling the market it needs vastly more, and that it expects to have enough to spare, within 12 days.
That contradiction is not really about Meta. It’s the question the whole AI buildout has been dodging: how much of the compute already bought is actually being used?
The most flattering answer is also the most revealingStart with the most charitable reading, because it’s probably the right one. Meta is building for the future and renting out the slack until it needs it. That isn’t a stretch. It follows a basic cloud logic: build at scale, then sell the capacity you aren’t using yet. AWS turned that model into Amazon’s most profitable business. If that’s the play, selling "excess" compute is the smartest move on the board.
But it only works when the provider can measure its own utilization precisely, so it knows exactly how much slack it can safely lease out. The real question about Meta is not whether building ahead is wise. It’s whether Meta can prove which story it’s in. Without a utilization number, no outsider can separate "deliberately built ahead" from "bought more than the workloads will absorb." That gap is not academic. Amazon, Microsoft, Alphabet and Meta plan to spend roughly $725 billion in 2026 capital spending, primarily for AI data-center equipment, up 77% from last year. Even a small utilization miss across a buildout that large can strand billions in equipment sitting warm, waiting for work.
The polite word for selling that gear is optionality. The blunt one is overbuilding.
Why the market cheered the confusionThe stock reaction is the tell. Meta shares rose about 8.8% on the report, while a chunk of the chip complex sold off the same day. Micron dropped 10.6%. AMD fell nearly 7%. Even Nvidia slipped.
Meta's plan was probably a catalyst rather than the whole cause; semiconductors had run up hard, and doubts about whether AI spending could hold this pace were already in the air. But the split is hard to unsee. Investors paid up for the company that found a fresh way to earn money off its infrastructure, and stepped back from the companies whose growth assumes hyperscalers keep buying hardware forever. For most of this boom, the market rewarded whoever built the most. That afternoon offered an early sign that investors may be starting to grade something harder: what the buildout actually returns.
The number every board is about to get asked forHaving sat through enough capital-allocation reviews to recognize the pattern, I hear “we can always sell the excess” differently. It doesn’t sound like confidence. It sounds like management doesn’t want to say how much of the capacity it actually expects to use.
Every company in this race can quote its inputs: GPUs bought, gigawatts planned, dollars committed. What public disclosures rarely include is the one figure that would settle it: how much of that capacity is doing real work, rather than sitting warm and depreciating. Meta may have a strong answer, and it’s plainly still expanding rather than retreating, which is exactly why the resale plan is worth watching. It hints that owning the most compute is no longer the whole game. The gear has to be used, priced, and measured against a result.
Resale is a thin safety net anyway. AI hardware can lose value quickly, each new chip generation raises the bar, and specialized clouds already compete hard on price, so capacity that looks scarce today can cheapen the moment a few sellers crowd in. A 5-gigawatt buildout still depends on transformers, transmission lines and other grid hardware, and those physical constraints don’t care how the compute eventually gets billed.
What executives should do about itThe buildout wasn’t necessarily a mistake. Demand may grow into it. But the metric the market rewards is shifting under everyone’s feet. Phase one measured ambition by how much you would spend. Phase two measures how well you use it. Before the next infrastructure check clears, boards and CFOs should ask three plain questions: what share of the AI compute we already own is in productive use, what business result it produces, and who owns moving that number. If nobody can answer, you don’t have an infrastructure strategy. You have a very expensive warehouse.
Meta Platforms, Inc. (NASDAQ:META) shares traded lower on Monday; they are overbought and are near a resistance level.
These can be bearish dynamics, which is why Meta is the Stock of the Day,
Markets are driven by supply and demand. If there is more demand than supply, meaning there are more shares to be bought than there are for sale, buyers will be forced to outbid each other to draw sellers into the market.
This will put the shares into an uptrend.
At resistance levels, there is enough supply to fill all of the demand. Buyers can stop outbidding each other, and the rally ends.
Sometimes when a stock reaches a resistance level, a reversal follows.
This happens when some of the sellers who created the resistance become anxious and impatient. They know that the buyers will go to whoever is willing to sell at the lowest price.
As a result, they reduce their offering prices. Other anxious and impatient sellers do the same thing. This forces the shares into a downtrend.
You can see on the chart that there was resistance for Meta around $686 in April. When the shares sold off after many of the investors and traders who bought at the level regretted doing so.
A number of them made the decision to hold onto their losing positions. But they also decided to sell out at breakeven if they could eventually do so.
This means that if Meta returns to this level, these remorseful buyers will place sell orders. If there is a large enough number of them, it could create resistance at the level again.
The shares are also overbought. They are trading above their typical range. This could draw sellers into the market. They will be anticipating a reversion to the mean or a move lower, and their selling could put pressure on the shares.
The combination of being overbought while at resistance could mean the uptrend in Meta may soon pause or end. There may even be a reversal.
Photo: Shutterstock
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Jim Cramer says a single AI product decision at Meta Platforms (NASDAQ:META | META Price Prediction) just moved the stock roughly $100 per share, and he is using it as Exhibit A for why big tech is nearly impossible to trim.
In his Sunday column, Cramer wrote that on the June 30 episode of Mad Money he argued a cloud business announcement from Meta would be “worth an easy 100 points, or $100 per share, for the stock,” back when shares closed at $563. Ten trading days later, they closed at $669.21.
That is a 14.81% move in a single week and a 17.31% move in a month on a company with a $1.7 trillion market cap. Cramer’s takeaway, published on CNBC: “By a simple stroke of a pen, Meta gives you 100 points, or almost 20%.”
The Catalyst Cramer Called The specific event was Meta signaling it would rent out excess AI compute. Zuckerberg told Bloomberg last week that “the offers that you get for using the compute are so high that it may make sense, in some cases, to rent out or consider those kind of deals instead of your own internal uses.” Meta jumped 5.97% on Friday, July 10, closing at $669.21.
The compute-monetization pivot lands on top of Meta Superintelligence Labs, the new AI research entity Zuckerberg introduced on the Q1 2026 call. He described it as a “milestone quarter” that included “the release of our first model from Meta Superintelligence Labs” and reiterated the goal of “personal superintelligence to billions of people.”
The Numbers Under the Rally Meta’s Q1 2026 report, filed with the SEC on April 29, showed revenue of $56.31 billion, up 33.08% year over year, and EPS of $10.44 against a $6.66 estimate. The advertising engine grew 33%, with ad impressions +19% and average price per ad +12%. Family daily active people reached 3.56 billion.
The catch: capex. Meta raised full-year 2026 capital expenditure guidance to $125–145 billion, up from a prior $115–135 billion range. Q1 capex alone hit $19 billion. Cramer’s argument is that the compute-rental pivot changes how investors should think about that spend, because dormant infrastructure suddenly becomes a revenue line rather than a capex sinkhole.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Meta didn't make the cut. Grab the names FREE today.
Debt Versus AI Payback The bear case Cramer is answering is leverage. Total debt has climbed from $13.87 billion at year-end 2021 to $86.77 billion at the end of Q1 2026. Capital lease obligations tied to AI data centers doubled to $28.02 billion. Debt-to-equity has moved from 0.111 to 0.356.
The offset is cash generation. Retained earnings reached $144.65 billion. Operating cash flow in Q1 was $32.23 billion. Liquid assets total $51.84 billion, and the current ratio sits at 2.35x.
Investors sorting the AI winners from the also-rans may find useful context in our 7 Stocks Powering the AI Boom (That Aren’t Chipmakers) report, which frames why hyperscalers with in-house monetization paths get valued differently than pure infrastructure plays.
What to Watch Next At 24x trailing earnings and 19x forward, Meta is not cheap on a growth-adjusted basis, but the analyst consensus target of $828.34 implies room above current levels, backed by 49 Buy and 8 Strong Buy ratings against zero Sell calls. Q2 revenue guidance is $58–61 billion.
Prediction markets are notably split on tempo. Polymarket traders assign a 64.5% probability that shares finish today lower, yet give Meta an 80.5% chance of ending 2026 with a higher valuation than OpenAI. That is the exact tension Cramer’s column captures: near-term digestion is possible, but the AI optionality is the reason he says these names are so hard to leave.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Meta didn't make the cut. Grab the names FREE today.
$125 billion to $145 billion. That is what Meta Platforms (NASDAQ:META | META Price Prediction) now expects to spend on capital expenditures in 2026, raised from a prior range of $120 to $135 billion when the company reported first-quarter results on April 29, 2026.
Now, this is forward-looking guidance, not a reported figure. That said, this number stands against a 2025 full-year capex base of $72.215 billion. The framing writes itself: Meta is preparing to deploy roughly $50 billion more on AI infrastructure this year than last, and CFO Susan Li told analysts the raise reflects “higher component pricing this year and, to a lesser extent, additional data center costs to support future-year capacity.”
What It Means The scale is what stops you. In the first quarter alone, Meta spent $18.997 billion on capex, up 46.8% year over year. The company also disclosed that multiyear cloud deals and infrastructure purchase agreements drove a $107 billion step up in contractual commitments during the quarter. Zuckerberg framed the spend directly: “We are investing aggressively to meet our infrastructure needs and ensure we maximize our strategic flexibility over the coming years.”
What backs the spend is a business still compounding at scale. Q1 revenue came in at $56.311 billion, up 33.08% year over year, with operating income of $22.872 billion and a 41% operating margin. Ad impressions rose 19% and average price per ad rose 12%, both year over year, while family daily active people reached 3.56 billion. Free cash flow was $12.386 billion in the quarter, and operating cash flow reached $32.226 billion. Additionally, reported EPS of $10.44 exceeded expectations against a consensus of $6.6587, though investors should note the beat was inflated by an $8.03 billion one-time tax benefit tied to U.S. Treasury guidance on capitalized R&D, worth $3.13 per share.
Market Reaction Meta shares have not rewarded the Capex raise. From the Q1 filing date on April 29, 2026 through July 2, 2026, the stock is down 12.81%, moving from $668.53 to $582.90. Year to date, shares are off 11.54%. Over the past week, however, the stock has moved higher by 7.37%, and one TradingKey report attributed a 7.56% single-day gain on July 1 to plans to launch a cloud infrastructure business selling excess AI computing capacity.
Bull Case The bull case rests on three data points that connect the capex to cash. First, monetization is accelerating alongside the AI build. On Instagram, Q1 ranking improvements drove a 10% lift in Reels time spent, and Facebook video time rose more than 8% globally, the largest quarter-over-quarter gain in four years. Enhancements to the Lattice and GEM ad models delivered a more than 6% increase in conversion rate for landing page view ads.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Meta didn't make the cut. Grab the names FREE today.
Second, the business AI layer is scaling from a small base. Susan Li said Meta now has “more than 10 million conversations each week being facilitated through business AIs, up from 1 million at the start of the year.”
Third, the company is diversifying compute suppliers to control cost, with Zuckerberg noting Meta is “rolling out more than one gigawatt of our own custom silicon that we are developing with Broadcom as well as a significant amount of AMD chips to complement the new NVIDIA systems.”
I think Meta’s valuation still frames the setup as reasonable for a business growing revenue in the low 30s. The company’s trailing P/E multiple sits at 22, forward P/E at 19, and the analyst consensus target is $828.13 against a current price of $582.90. Ratings tilt heavily positive with 8 strong buy, 49 buy, 6 hold, and zero sell ratings. Prediction markets favor Meta over OpenAI at 81% probability of a higher year-end valuation.
Bottom Line For long-term holders, Meta’s raised capex range is the clearest statement the social media and tech giant has made about where the next decade of returns will come from. The company’s Q2 guidance calls for revenue of $58 to $61 billion, and management expects full-year 2026 operating income above 2025 levels even after absorbing the higher spend.
The next test is the Q2 earnings report against that $58 to $61 billion range. If ad pricing, impression growth, and business AI adoption keep compounding, the $125 billion to $145 billion looks like scale investors will eventually pay up for. If any of those levers slip, the same number becomes the bear case in one earnings cycle.
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A rendering of the Richland Parish data center. Meta Meta is scaling up what was already slated to become its largest AI data center, a Louisiana campus that the tech giant says has fueled "life-changing returns" for local teachers and businesses.
The company behind Facebook and Instagram said in a blog post on Monday that the Richland Parish data center, known as Hyperion, will now grow to 5 gigawatts of compute capacity, bringing the project's cost to more than $50 billion.
The announcement offers a new data point for Wall Street investors watching Meta closely for updates on its AI spending plans. The company's capital expenditures have ballooned in the last two years, largely due to AI infrastructure costs.
As part of its announcement, Meta touted the project's local economic impact, saying that the increased tax revenues tied to the data center have recently led to year-end bonuses of up to $50,000 for Richland Parish teachers.
That's 400% higher than what teachers received last year in the rural Louisiana parish that's home to about 20,000 people, according to Meta.
Sheldon Jones, the parish's school district superintendent, said in a statement shared by Meta that the influx of money has been "life-altering for our teachers and their families" and was "transforming our schools."
"Last year, our teachers received a $10,000 bonus, this year that check was over $50,000," Jones said, adding, "Meta's investment has made Richland Parish a destination for education as well as industry."
Jones did not immediately respond to a request by Business Insider for further comment.
The Hyperion project, according to Meta, is among the largest investments in AI infrastructure worldwide.
Meta said in its Monday post that local Louisiana businesses have received more than $1.6 billion in contracts from the company since it broke ground on the 4 million-square-foot site in December 2024.
"With this expansion, we will be investing over $1 billion in local infrastructure improvements, including roads, water and wastewater systems," said Meta.
It added that the company "pays the full costs of the energy, water, and related infrastructure the data center uses so consumers aren't paying the cost."
The project's expansion marks a dramatic escalation from last year when Meta and investment firm Blue Owl Capital put the data center's price tag at about $27 billion with plans for more than 2 gigawatts of compute capacity.
Once operational, Meta says the data center will create more than 1,000 jobs.
While Meta has highlighted the project's economic benefits, the rapid buildout of AI data centers by Big Tech has become a flashpoint, with critics raising widespread concerns about energy demand, water consumption, and the strain on local infrastructure.
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Natalie Musumeci You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Natalie is a senior reporter on Business Insider's Business News team.She was previously on BI's Legal Affairs team where she covered major cases out of state and federal court, as well as bankruptcy. Her coverage often focused on stories at the intersection of law, business, politics and technology. Natalie has covered Donald Trump’s criminal and civil cases, the wave of lawsuits against the second Trump administration, the indictment and criminal trial of Sean “Diddy” Combs, the shooting death of UnitedHealthcare CEO Brian Thompson, and the legal battles facing Elon Musk and his companies. Natalie came to Business Insider in June 2021 as a breaking news reporter, focusing on the most interesting angles around the trending news of the day. Natalie largely drove BI’s coverage around the fatal “Rust” shooting involving Alec Baldwin and the disappearance and murder of Gabby Petito.Prior to joining BI, Natalie worked for the New York Post, the New York Daily News, and The Brooklyn Paper. She has an extensive background covering crime and courts. During her more than 12-year journalism career, she did a stint covering the police beat out of the headquarters for the New York Police Department. Natalie, a Brooklyn native, graduated from Brooklyn College in 2012 with a journalism degree. Popular articles
Walmart and Amazon face legal trouble for using a points system to track and fire employees over absences: lawyersCelebrities who partied with Diddy may want to contact their lawyersAn unchecked AI could usher in a new dark ageAt Diddy's A-list 'white parties,' naked women were a staple — but that didn't seem to raise eyebrows at the timeThe illegal maneuvers the rich use to get richerOwner of ship that crashed into Baltimore bridge will likely try to invoke 1851 law used to cap damages after Titanic disaster AI Data Centers Meta More Tech
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52-Week Range$520.26▼
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After being down and out for several months, shares of Magnificent Seven giant Meta Platforms NASDAQ: META are starting to get their groove back. The stock recently popped 8.8% on reports that Meta will enter the cloud computing business, selling excess capacity to third parties.
Meta shares then saw two large single-day up moves on July 9 and July 10, rising 4.7% and 6%. Part of the stock’s latest gain is due to what is likely Meta’s most significant artificial intelligence (AI) model release: Muse Spark 1.1.
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Data indicates that Muse Spark 1.1 is Meta’s most intelligent model yet.
Additionally, the model may mark the beginning of an inflection point in Meta’s ability to generate revenue from AI products.
Muse Spark 1.1: Meta’s AI Model Intelligence Is on the RiseArtificial Analysis is a helpful source for gauging the relative capabilities of AI models. The company tests models on agentic, coding, general intelligence, and scientific reasoning to give them an “Intelligence Index” score. Currently, Muse Spark 1.1 has a score of 51, which is higher than any model developed by Alphabet NASDAQ: GOOGL. However, it still ranks below many of Anthropic's and OpenAI’s latest models, several of which have scores above 55.
Muse Spark 1.1’s score is also significantly higher than that of Meta’s initial Muse Spark model, with a score of 43. Going forward, it will be important to see whether Muse Spark 1.1 maintains this score and its relative standing among other models. Initially, Meta’s first Muse Spark model had a score of 52, but this has since fallen. This is likely because Artificial Analysis updates and reweights its evaluation framework over time.
Still, based on the latest testing, Muse Spark 1.1 represents a significant improvement over the original Muse Spark and ranks highly overall. This lends validation to Meta’s massive AI capital expenditures and its hiring of Chief AI Officer Alexandr Wang, who has been critical to Muse Spark’s development. Not only is Meta making better models, but for the first time, it is making a real monetization push.
Meta Steps Into AI Model MonetizationNotably, Muse Spark 1.1 marks the first time Meta will charge for access to its models. Meta will charge users on a per-token basis, or based on the amount of information the model processes and outputs, in a "pay-as-you-go" format. Anthropic and OpenAI allow users to pay for models in this way as well, but also provide access through flat monthly or annual fees.
One of the reasons to think that Muse Spark 1.1 could gain real traction and generate notable revenue for the firm is its pricing. CEO Mark Zuckerberg says Muse Spark 1.1’s per-token pricing is around 25% of what Anthropic and OpenAI charge for similar models. Artificial Analysis adds weight to this. It places Muse Spark 1.1’s “cost per Intelligence Index Task” around three times lower than OpenAI’s GPT-5.4, which also has an Intelligence Index Score of 51.
If Muse Spark 1.1 offers a level of intelligence comparable to another model but at a much lower cost, users have an incentive to adopt it. This gives Meta a realistic opportunity to start generating significant revenue directly through its AI model. This may come through software developers using it for coding tasks, an area where its performance is particularly improved over the original Muse Spark.
Still, it is possible that Meta is highly subsidizing its model cost, with Alexandr Wang calling the pricing “very aggressive and attractive.” The word ‘aggressive’ seems to indicate a degree of deliberate undercutting. In turn, Meta’s pricing may not be high enough to support the model profitably.
Nonetheless, through low pricing, Meta has an opportunity to prove Muse Spark’s capabilities to users, an important first step in generating sales. Over time, Meta can evolve its pricing to increase margins.
Patience Remains Key as Meta Looks to Monetize Muse Spark 1.1There is real reason for investors to feel excited about the progress Meta has made with Muse Spark 1.1. It has a better model and is now looking to monetize it to boost returns on its AI spending. Still, the true test will be what Meta shows over time in its actual financials.
Investors should monitor the company’s future earnings calls for data on how much revenue Muse Spark is bringing in. It may take time for Meta to provide detailed information on this, and the company’s near-term earnings reports may not give much insight.
Meanwhile, recent gains indicate investor optimism, and sentiment around Meta has not been this high in quite some time.
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I keep buying Meta, and the reason is embarrassingly simple: it is the only trillion-dollar AI story I can find where the buyer of the compute and the seller of the ads are the same company. Every time I add, I am buying a business that owns its picks, its shovels, and the mine.
The $13 billion, 1-gigawatt data center expansion in Alberta is what pushed me from “position” to “conviction.” Meta Platforms (NASDAQ:META | META Price Prediction) is partnering with local energy infrastructure to bypass grid constraints and control its own natural gas power, then running open-source Llama-family models on top of it. That is a vertical stack. Zuckerberg has already said Meta is “rolling out more than one gigawatt of our own custom silicon” alongside AMD and NVIDIA systems. The cloud giants I would otherwise own are renting land, waiting on substations, and marking up someone else’s GPUs.
The Numbers That Keep the Buy Button Warm Start with the earnings report. Q1 2026 delivered EPS of $10.44 versus a $6.66 consensus, a 56.79% beat and the fifth straight quarter of EPS beats, on revenue of $56.31 billion, up 33.1% year over year. Ad impressions rose 19% and average price per ad climbed 12%, so both sides of the ad equation are expanding at once.
Then the margins. Meta ran an operating margin of 41% while pushing $18.997 billion of capex in a single quarter. The full-year 2026 capex range is $125 to $145 billion, and the business still generated $32.226 billion of operating cash flow in the quarter. That is what a fortress income statement looks like.
Then the price you pay for it. Meta trades at a 22 trailing P/E and a 20 forward P/E, with a PEG of 0.889 and an analyst target of $828.17 against a $631.48 quote.
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Why Not AWS or Azure I own the cloud story indirectly through Meta, so I do not need to reach for Microsoft (NASDAQ:MSFT) or Amazon (NASDAQ:AMZN). Microsoft is down 23.05% over the trailing year and 20.17% year to date, and it announced 4,800 job cuts amid pressure to show AI ROI. Amazon has run up 11.01% over one year, but it is raising $25 billion in a bond sale to finance AI capex. Meta is funding its buildout out of its own ad engine while carrying interest coverage of 71.48x. When the compute layer commoditizes, the rentiers get squeezed and the owner-operator keeps the spread.
The Risk I Actually Respect Reality Labs bled $19.2 billion in 2025, and youth-related litigation trials scheduled in 2026 may result in material losses. Capex could also outrun revenue if AI monetization slips. What keeps my thesis intact: 3.56 billion daily active people and business AI conversations that grew from 1 million to more than 10 million per week in a single year. That is the distribution monopoly paying the infrastructure bill.
What Keeps the Buy Button Active Prediction markets currently give a 76.5% probability that Meta will outvalue OpenAI by year-end 2026. I am paying for the machine that produces it: owned power, owned silicon, owned models, owned audience. As long as that stack holds together at a 20 forward multiple, my finger stays on the buy button.
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BI By You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
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2026-07-13T14:16:39.758Z
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Meta is pushing advertisers to use its AI tools — and results are proving chaotic: strangely twisted limbs, gibberish writing, or entirely changed products.
Meta's response to brands: That's on you, not us.
The tech giant has inserted a slew of AI features into its ad products in recent months. Working as designed, they can help make tweaks to ads that improve their likelihood of being clicked. But advertisers say the tools are clunky and generate misrepresentations and absurdities.
Business Insider spoke with eight advertisers and agency execs who said dealing with Meta AI problems had become routine.
Jessica Gleim, an ads consultant who works with female-founded brands, told Business Insider she regularly sees odd outcomes in Meta's AI creative recommendations for ads she's working on.
For one of her clients, a pajama brand, Meta recommended new assets that altered the actual product. The brand was promoting a pajama dress, and Meta suggested a new image with a shirt and pants. For another client, a networking group for women in Montana, Meta had a new vision for those ads: adding men.
Meta AI's suggested changes to a women's group ad included adding a man. BI "It's not usable to help my clients grow their business," Gleim said.
While some of Meta's AI ad features are turned off by default, advertisers say they have been prone to bugs that accidentally turn them on. Karissa Tuccio, executive director of social and influencer at Mediassociates, said a bug that toggled AI settings on had regularly affected most of the 15 clients for whom she handles Meta advertising. She said she had flagged the bug to her Meta rep as recently as Thursday.
Meta's AI completely changed the product in this suggested ad tweak that Gleim encountered. BI Outdoor retailer REI drew consumer backlash last month for running an Instagram ad depicting a nonsensical bike with two handlebars. REI said Meta had "auto-enrolled" it in an AI feature that spat out an "inaccurate" and "inappropriate" image.
A Meta spokesperson said that the company's terms of service state that "AI can make mistakes and that it is the advertiser's responsibility to review the AI outputs."
Advertisers' chief complaint about Meta's AI ad tools is simple: They feel they have to double-check all the AI features for each campaign to make sure nothing is inadvertently switched on or has gone haywire. With some advertisers and agencies running hundreds or thousands of ads at any given time, the extra steps required to wrangle the AI tools create more work.
REI's AI ad accident drew a big online backlash from customers. BI "We somehow accepted that as a new standard operating procedure," said Rok Hladnik, CEO of the marketing agency Flat Circle, which manages around $200 million in annual Meta ad spending for numerous direct-to-consumer brands.
Brands and advertisers say that while AI failures can be an amusing talking point on the internet, they can pose real problems for a brand.
"When the AI starts generating weird creative or making unapproved changes, it can quietly damage brand perception — especially for anyone who cares about consistency," said Robert Webster, CEO of TAU Marketing, which manages around $500 million in annual ad spending across various platforms.
A Valentine's Day surpriseAround Valentine's Day, photographer and marketer Abigail Hogue was uploading an ad campaign to Meta. She works with a small business, Quite Literally Books, and had shot the creative assets for the holiday campaign with chocolates, macarons, candles, and books. Hogue was proud of the work she'd done.
"About 12 hours later, when everything was approved and started to run, I started getting some messages from friends and people that I knew and screenshots of some of these ads that were running, cheekily accusing me of AI slop," Hogue said.
The text on the products in the images was "garbled," and the "actual products look like knockoff iterations of themselves," she said.
Abigail Hogue was horrified at how Meta's AI altered her ad. Quite Literally Books; BI When Hogue saw the AI ad, she went into a panic and edited the campaign in Meta's Ads Manager, turned off all AI creative enhancements, and then republished the ads.
She then spent hours in a back-and-forth with Meta customer service. Representatives told her it was a "sporadic" and "one-off occurrence," and also said it was a "glitch," according to screenshots of their exchange viewed by Business Insider. She requested a refund, and Meta acknowledged her request. Quite Literally Books said it hadn't received a refund as of Friday afternoon.
Other advertisers have told Business Insider about their strange Meta AI ads, ranging from an unrealistic granny in loungewear to a model whose leg appeared to be completely bent the wrong way.
Luke Jonas, chief growth officer of the marketing agency Nest Commerce, emphasized the importance of keeping a human in the loop when testing AI-generated ads.
"A machine optimizing for 6 million advertisers will occasionally give you two handlebars," Jonas said, referencing the REI ad.
While two advertisers said Meta appeared to have fixed a bug that was toggling AI settings on for their clients, Mediassociates' Tuccio said a similar issue persisted for her as of last week.
Tuccio said a Meta rep told her last week that Meta had developed a quality-control dashboard for big advertisers to ensure their ads don't go live with unwanted AI enhancements.
"She mentioned, 'If you guys have a big launch coming up, you can send me all the ad IDs, and we have an internal dash that will check to make sure all of the enhancements have been fully turned off,'" Tuccio said. "So that leads me to believe it has not been resolved."
'Meta's still the best platform'Starting last month, Meta began automatically applying an "AI info label" to ads when they use its AI tools — or third-party tools like Midjourney or Dall-E — to create or significantly edit their ads. To see it, users must click the three dots above an ad, select "about this ad," and then tap on "AI info." Google added labels last week to indicate whether ads were created or edited using AI.
Meta is also improving its AI image generation models. Last week, it began rolling out Muse Image, a model developed by its Superintelligence Labs, which can help advertisers develop their creative assets. (Following backlash, Meta on Friday removed a feature in Muse Image that let users generate AI images from other people's public Instagram posts, saying it "missed the mark.")
Still, advertisers say Meta's basic design encourages relinquishing control to the system, which can lead to disastrous results.
"The defaults are aggressive, the toggles are easy to miss, and the system is clearly designed to reduce friction so more money flows through the platform with less manual intervention," TAU's Webster said.
Meta says "millions of advertisers are finding value and improved performance using our Advantage+ creative tools to support ad creation." The Meta spokesperson added that the company's AI image generation tool, which creates variations based on a seed image provided by the advertiser, is turned off by default.
Meta isn't alone in automatically modifying advertisers' creative. Google's Performance Max and AI Max products also use AI to scrape ad copy from brand websites and automatically crop or shorten videos for placements such as YouTube Shorts. Some of these AI automation features are enabled by default, though Google has largely avoided the kind of high-profile issues Meta has seen.
Danny Weisman, cofounder of Obsessed Media, said the main complaint he's heard about Google from brands is that ads made with its AI tools could turn out looking "ugly."
"It's not like someone's hand is missing," he said.
Meta's ad business, which pulled in around $196 billion in revenue last year, remains essential to most brands' customer acquisition strategies. Its reach of 3.5 billion daily active users and highly sophisticated ad targeting platform make it difficult to quit, even if problems arise.
"That means it can make unpopular decisions that boost its own profits with near impunity, because most advertisers cannot realistically walk away," TAU's Webster said.
Then there's the simple truth: Meta ads generally get results.
"Meta's still the best platform," Gleim said. "It has the most robust options. It has the most data."
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Lara O'Reilly You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Lara O'Reilly is the anchor of the CMO Insider newsletter.She is a senior correspondent who has covered the digital advertising, marketing, and media industries since 2010. Her current beat includes big tech companies like Alphabet, and Meta, and adtech firms, agencies, publishers, the creator economy, and CMOs.Lara has previously worked as a reporter and executive producer at titles including The Wall Street Journal, Digiday, Yahoo Finance, and Marketing Week. She was previously Business Insider's senior global advertising editor from 2014 to 2017.Lara was named "Digital Journalist of the Year" by the London Press Club in 2016.Lara is a regular guest on TV and radio and has appeared on outlets such as the BBC, NPR, SiriusXM's Wharton Business Daily, and CTV Television Network. She also frequently speaks on stage at major events such as Web Summit, IFA, VivaTech, Advertising Week, and Cannes Lions.To get in touch with Lara O'Reilly, email [email protected] or contact her on Signal at @loreilly.71Check out Insider's source guide for tips on sharing information securely.Read some of Lara's recent work below:
Inside Amazon's plan to clobber rivals The Trade Desk and Google in a key area of advertisingMeet Cindy Rose, the former lawyer and top Microsoft exec set to become CEO of ad giant WPPHow X CEO Linda Yaccarino went from Elon Musk's fixer to out of a job in 2 yearsInside the political reckoning shaking up the ad industryMeet the 'reclusive' tech billionaire making an audacious bid to buy TikTokTop marketers are under a ton of pressure. They told me how they're trying to make themselves recession-proof.Big Tech workers got too used to perks. The pampering is over.
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Sydney Bradley has been covering media and tech for Business Insider since 2020. She breaks news and writes extensively about Instagram and Facebook, as well as new platforms and startups shaping social media, dating apps, the creator economy, venture capital, and tech culture.Sydney's reporting on Instagram was nominated as a finalist for the 2021 Los Angeles Press Club National Entertainment Journalism Awards.She graduated from the University of Virginia with a degree in American Studies. You can follow Sydney's work on LinkedIn, Twitter, and Instagram at @sydneykbradley.Have a tip? You can also contact her via encrypted messaging app Signal (@sydneykbradley.123), encrypted email ([email protected]), or standard email ([email protected]). Use a personal email address, a nonwork WiFi network, and a nonwork device; here’s our guide to sharing information securely.Selected stories:
Young founders are going viral modeDeath isn't the end: Meta patented an AI that lets you keep posting from beyond the graveDating apps are betting millions that AI will convince you to fall back in love with themHitting the social media jackpot is harder than ever — and it's changing the creator economyBig Tech's AI obsession is rattling creatorsNew startups race to bring back the 'old internet' vibes of the 2000sThe mysterious demise of a $1 billion social shopping appThe loneliness epidemic has given rise to a new crop of startups aiming to help people connect in real lifeIt's not just you — no one is posting on social media anymoreHow Instagram's unpredictable changes are giving influencers whiplashWhy YouTube subscriber counts have become an unreliable 'vanity metric' in the era of short videoInside the week that changed Facebook forever
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Lucia Moses covers the media and entertainment business, with a focus on creators. She's broken stories about MrBeast's business ambitions, Google's movie initiative, and Netflix's push into podcasts.Her reporting has won the Los Angeles Press Club's National Entertainment Journalism Awards.She previously worked at Digiday and Adweek and graduated from Cornell University.Reach her at [email protected], X at @lmoses, LinkedIn, or via phone/text/Signal at (917) 209-8549.Popular articles
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Meta (NASDAQ:META | META Price Prediction) is charging businesses to use one of its AI models for the first time, undercutting rivals significantly. On July 9, 2026, Meta launched Muse Spark 1.1, a frontier model’s paid developer tier costs roughly 25% of what OpenAI and Anthropic charge, meaning developers pay about 75% less. Mark Zuckerberg’s pitch: make AI cheap enough that everyone builds on Meta’s platform.
This marks a genuine pivot. Meta championed open-source AI; Muse Spark 1.1 is proprietary and revenue-focused. As Zuckerberg told Bloomberg on July 9, “Since this isn’t an open-source model, this is really the first time we’re seriously launching an API business.”
The Pitch in Zuckerberg’s Words Where rivals charge $5 to $10 per million input tokens and $30 to $50 per million output tokens, Meta costs roughly a quarter of that. Vals.ai found Muse Spark 1.1 runs at about one-tenth the cost of GPT-5.5, while AnalysisAI measured input costs roughly 75% below Anthropic’s Claude Opus 4.8 and output costs about 83% lower. “The pricing is going to be very aggressive and attractive,” Zuckerberg framed it as a mission: “Someone has to build these models and make sure the highest quality intelligence is available to everyone.”
Why Meta Had to Do This Meta committed $125 to $145 billion in 2026 capex, its largest ever, with shares gaining 14.81% in the week ending July 10. In April, Zuckerberg said: “We had a milestone quarter with strong momentum across our apps and the release of our first model from Meta Superintelligence Labs.” Meta is co-developing a custom “Iris” AI chip with Broadcom, manufactured by TSMC, cutting Nvidia dependence and lowering inference costs. A leaked memo revealed plans to put Iris into production in September and double computing capacity to 14 gigawatts. Our AI infrastructure research covers second-order beneficiaries in this report on power and data-center names beyond chipmakers.
Ticker Exposure to Meta’s AI Buildout Broadcom (NASDAQ:AVGO) is tied to Iris and posted Q2 FY2026 AI semiconductor revenue of $10.8 billion, up 143% year over year. CEO Hock Tan said: “The momentum continues and in Q3 we expect semiconductor revenue from AI to grow over 200 percent year-over-year to $16.0 billion.” Taiwan Semiconductor (NYSE:TSM) fabricates both Iris and Nvidia GPUs. Its May 2026 revenue rose 30.1% year over year. SemiAnalysis projects Meta’s total AI compute will surpass OpenAI’s and Anthropic’s by year end.
The Open Question On July 2, he admitted AI “hasn’t really accelerated in the way we expected” internally, creating tension with this week’s bullish launch. Muse Spark 1.1 competes on price and capability while still trailing GPT-5.5 on outright performance. Meta’s true frontier model, “Watermelon,” is still in development. If it delivers, the bet gets interesting. If not, Meta may have started a price war it cannot win. Can 75%-cheaper AI earn back a $145 billion infrastructure bill?
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Meta’s First AI Monetization PushIn a note, JPMorgan said Meta’s newly launched Model API marks the company’s first meaningful step toward external AI monetization. The public preview allows developers to build applications using Meta’s latest Muse Spark 1.1 model, opening the door to revenue streams beyond the company’s core digital advertising business.
The bigger surprise, however, may be the price.
According to JPMorgan analyst Doug Anmuth, comments from a Bloomberg interview with CEO Mark Zuckerberg suggest Meta plans to charge roughly 25% of what leading AI models from OpenAI and Anthropic cost, a pricing strategy the bank believes could help Meta quickly gain traction with developers and enterprise customers.
“API pricing at a fraction of competitors should help Meta gain external monetization scale,” Anmuth said.
A New Front In The AI RaceThe aggressive pricing comes as Meta appears to be shifting from building AI solely for internal products to competing directly in the enterprise AI market.
He also pointed to early signs of a broader enterprise strategy following the launch of Meta’s Business Agent platform and Model API, calling the move an encouraging step toward monetizing AI outside advertising.
Making A Massive AI Bet Pay OffThe monetization push also helps answer one of Wall Street’s biggest questions: how Meta plans to generate returns on its enormous AI spending.
JPMorgan expects Meta’s capital expenditures to reach $142 billion in 2026, up 104% year over year, before climbing to $202 billion in 2027, with the potential for further increases.
At the same time, Reuters recently reported that Meta plans to expand its AI compute capacity to 7 gigawatts in 2026 and 14 gigawatts in 2027, giving the company enough infrastructure to support both its own AI products and new external businesses.
Beyond selling AI models through APIs, Anmuth also sees another opportunity. Zuckerberg recently suggested excess computing capacity could eventually be rented out, giving Meta the flexibility to monetize its infrastructure if it builds more capacity than its internal AI products require.
For now, JPMorgan remains Neutral on Meta with a $725 price target, but said the company’s improving AI models, early monetization efforts and willingness to expand beyond advertising could create upside if developer adoption and enterprise demand accelerate.
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Meta yanked its new Instagram AI image feature – which automatically opted in photos from all public accounts – just a few days after launch following heated backlash over privacy concerns.
“Our intent was to provide a useful creative tool and to give people control over whether their public content could be referenced in this way,” Meta said in a statement Friday.
“We’ve heard the feedback that this feature missed the mark, so it’s no longer available.”
Meta yanked its new Instagram AI image feature just a few days after launch following heated backlash. ZUMAPRESS.com The Instagram, Facebook and WhatsApp owner last Tuesday launched Muse Image, its first AI image generator meant to compete with OpenAI’s ChatGPT Images 2.0 and Google’s Nano Banana 2.
Meta’s Superintelligence Labs folded the new bot into Instagram and automatically enrolled all public accounts, meaning anyone on the internet could simply tag your username in an AI prompt and generate an image using your likeness.
Instagram accounts would not be notified about content created using the AI image tool, so your photos and videos could be transformed by other users without your knowledge – unless you manually turned off the feature in settings.
“This is diabolical,” one user wrote in a post on X, complaining that they were unable to turn off the feature. “It keeps automatically toggling it back on. I can’t turn it off unless I go private.”
Another user complained: “Basically now anyone can clone your voice, face easily on Insta. And even if you figure this privacy setting out and switch it off, some are reporting it turns on by itself. So I have a simple recommendation as always. Stop using Meta’s products.”
Many online blasted Meta for automatically enrolling public accounts, with one writing, “Classic Instagram making us do homework just to keep our privacy,” while another wrote, “If a feature requires harvesting my identity, it should never start as a ‘yes.’”
Others argued that Meta had likely automatically enrolled accounts because the public remains skeptical of artificial intelligence.
Meta CEO Mark Zuckerberg arrives for a trial over whether social media apps are deliberately addictive for children in Los Angeles on Feb. 18. AP Photo/Ryan Sun “AI features like this in Meta and Google services are opt in by default because they get to show their reports as NUMBER GO UP, after pouring billions into AI that NO ONE WANTS!” one infuriated user wrote.
“Damn theyre [sic] trying real hard to force their slop down eveyrone’s [sic] throat,” another jibed.
Yet another asked: “How is there not 1 [sic] sensible human on that leadership team to say, ‘Oh wait, our customers hate this slop. Maybe we shouldn’t force it on them?’”
People also shared difficulties turning off the feature through the web browser version of Instagram, saying they needed to download the app to opt-out of the tool.
Emmy-winning actor and “Hacks” star Hannah Einbinder slammed the feature in a post on Instagram, as did SAG-AFTRA, the union representing Hollywood actors and workers.
After Meta scrapped the feature, a spokesperson for the union said: “With the dangers of nonconsensual digital replicas well known to all, a feature that encouraged that behavior is unwise. We appreciate its discontinuance. It is the responsible thing to do.”
It’s not the first AI image generator to face backlash, after Elon Musk’s Grok launched a similar tool earlier this year.
His AI company is currently facing a class-action lawsuit and an EU privacy investigation after Grok allowed users to “nudify” images of real women and children on social-media platform X.
Apple reportedly privately threatened to remove Grok from its App Store in January over the deepfake controversy.
Meta expands its Louisiana data center to 5 gigawatts while total expected investment could exceed $250 billion. Summary
Meta accelerates AI infrastructure with its largest data center project yet.
Meta Platforms META , the company behind Facebook and a major builder of artificial intelligence infrastructure, is preparing to commit substantially more capital to its data center campus in rural Louisiana as it races to secure additional computing power. Meta announced that the Richland Parish project will expand to at least 5 gigawatts of computing capacity at a cost of $50 billion, compared with the company's previously disclosed $10 billion investment. Bloomberg previously reported that Meta could spend another $200 billion on the development, largely for the expensive computing chips expected to operate inside the nearly 4,000-acre site. Including those costs, the total expected investment could exceed $250 billion, according to a person familiar with the financing, although Meta has publicly disclosed only $50 billion of spending for the project.
Chief Executive Officer Mark Zuckerberg has increased infrastructure spending over the past two years as he seeks the data center capacity needed to pursue AI superintelligence. Meta currently has 33 data centers either completed or under active development, while Zuckerberg has pledged to invest at least $600 billion in U.S. infrastructure projects over the next several years. The company also committed $10 billion last week to build its first data center in Canada, suggesting that access to AI computing capacity remains a central part of Meta's expansion strategy. Zuckerberg said Meta continues to seek as much computing power as it can obtain, while the company is also considering renting some capacity to outside customers through a possible cloud infrastructure business.
The scale of the Louisiana development has brought in additional financial and power-sector partners. Blue Owl Capital OWL , an outside investor that owns an 80% stake in the project, has approached Wall Street for billions of dollars to help finance construction, while Entergy Louisiana, the utility supporting the campus, is spending billions to build 10 gas-fired power plants. Meta said the completed data center will support 1,000 jobs, twice its earlier commitment, and has already generated more than $1.6 billion in contracts for Louisiana businesses since construction began in December 2024. Investors may also watch whether Meta's infrastructure spending eventually creates a new source of revenue, as the company has discussed selling access to raw computing capacity through a model resembling CoreWeave, a neocloud computing provider.
Meta (META), a technology giant expanding its artificial intelligence infrastructure, is increasing the scale of its Hyperion AI data center supercluster in rur
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Meta's massive Hyperion data center project in rural Louisiana is getting much bigger and costlier, with a big assist from the state's government.
The company said in a blog post on Monday that the site in Richland Parish, Louisiana — home to what will be Meta's largest data center — will be a 5GW facility and cost over $50 billion. That's higher than the $27 billion figure that was revealed in October, when Meta and Blue Owl Capital formed a joint venture to help with the buildout and management of the facility, originally planned as a 2GW data center.
As Meta pursues its multi-hundred-billion-dollar buildout artificial intelligence buildout, the company and hyperscaler rivals Microsoft, Alphabet and Amazon are taking advantage of tax rebates and energy deals being offered by states that are fighting to get a piece of the AI boom.
In late 2024, Louisiana Republican Governor Jeff Landry signed into law a 20-year sales tax exemption for data centers built before 2029 as part of an effort to court Meta in the state, CNBC previously reported. Landry is set to host a press event on Monday in Baton Rouge.
"I'm a business guy," Landry told CNBC in an interview last year. "What we know is when you look at the overall comprehensive package here, it's in the black. For local government, and the state, and how you get to the bottom line is irrespective to me."
Meta is expanding the project as it seeks to build out enough AI infrastructure to meet demand. The announcement comes after Meta had its best week on the stock market since early 2024 following the release of two major AI models under the leadership of AI chief Alexandr Wang, head of Meta Superintelligence Labs. Investors have been looking for the company to start showing returns on its outsized AI investments.
Meta said in Monday's post that the company "pays the full costs of the energy, water, and related infrastructure the data center uses so consumers aren't paying the cost." Since construction of the Louisiana data center began in December 2024, local businesses have received over $1.6 billion in contracts from Meta, the company said.
"With this expansion, we will be investing over $1 billion in local infrastructure improvements, including roads, water and wastewater systems," Meta said in the post. The company didn't announce a financial partner for the expansion.
When the project began, the estimated price tag was $10 billion. CEO Mark Zuckerberg said in a Facebook post roughly six months later that the supercluster, named Hyperion, would be "able to scale up to 5GW over several years." Unlike traditional data centers, superclusters are packed with graphics processing units and related cutting-edge hardware tailored for AI workloads.
"Meta Superintelligence Labs will have industry-leading levels of compute and by far the greatest compute per researcher," Zuckerberg wrote.
A Meta spokesperson told CNBC that the Hyperion project should reach 2GW by 2030, but there's no timeline for when the full 5GW project will be completed.
People walk behind a logo of Meta Platforms company, during a conference in Mumbai, India, September 20, 2023. REUTERS/Francis Mascarenhas Purchase Licensing Rights, opens new tab
CompaniesJuly 13 (Reuters) - Meta (META.O), opens new tab said on Monday its data center in Richland Parish, Louisiana, will expand to 5 gigawatts of compute capacity, with investment in the project increasing to more than $50 billion.
The planned data center, known as Hyperion, was earlier projected to deliver more than 2 gigawatts of compute capacity to support training of large language models, the technology behind tools such as ChatGPT.
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Here are some details:
The announcement comes as environmental and consumer groups increasingly push back against the energy-intensive buildout.
U.S. environmental law group Earthjustice's request to investigate the financing of Meta's Louisiana data center project was denied earlier this year.
Earthjustice had said the financing arrangement could ultimately shift project costs unfairly onto utility customers if Meta walks away from the project before the utility recovers its investment.
Last year, U.S. President Donald Trump had said the company's data center project would cost $50 billion.
Since breaking ground in December 2024, local Louisiana businesses have received more than $1.6 billion in contracts from Meta, the company said.
With this expansion, the company said it plans to invest over $1 billion in local infrastructure improvements, including roads, water and wastewater systems.
Meta, like its Big Tech peers, has been pouring billions of dollars into AI data centers and computing power, as demand continues to outstrip supply.
The company has pledged to invest $600 billion in U.S. infrastructure and jobs over the next three years, as it builds out massive data centers to power CEO Mark Zuckerberg's aggressive bets on AI agent technologies.
Reporting by Jaspreet Singh in Bengaluru; Editing by Leroy Leo and Devika Syamnath
Our Standards: The Thomson Reuters Trust Principles., opens new tab
The company scaled up the size of its massive data-center project in Northeast Louisiana to 5 gigawatts of compute capacity and said it would now cost more than $50 billion.
Shares of Meta Platforms (META +6.16%) climbed about 15% this past week after the social media and cloud computing colossus disclosed some exiting developments.
Image source: The Motley Fool.
Meta wants to make its own AI chips Meta will launch a custom-designed artificial intelligence (AI) chip in September, according to a Reuters. The new chips are part of the cloud giant's plans to increase its computing capacity to 14 gigawatts (GW) in 2027 from a projected 7 GW in 2026.
For context, a single gigawatt can power roughly 750,000 homes.
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Meta's custom chips are intended to reduce its reliance on chipmakers like Nvidia and Advanced Micro Devices, which have enjoyed tremendous pricing power as demand for their products has outpaced supply.
By making more of its own chips, Meta should be able to reduce its infrastructure costs and alleviate supply constraints. To do so, Meta is reportedly partnering with Broadcom and Taiwan Semiconductor Manufacturing.
Looking further ahead, Meta hopes to develop upgraded versions of its chips at an aggressive six-month cadence.
Entering the AI coding arena Meta also debuted an upgraded version of its Muse Spark AI model on Thursday.
Muse Spark 1.1 was designed by Meta Superintelligence Labs (MSL) to excel at agentic AI and coding tasks. It's significantly faster than previous versions and can quickly orchestrate multi-agent systems. This means it's well suited to serve as the main agent and delegate work to subagents.
Additionally, Meta says that from a coding perspective, Muse Spark 1.1 is substantially better at diagnosing and fixing bugs.
Taken together, these developments helped to reassure investors that Meta remains at the cutting edge of the AI race.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Broadcom, Meta Platforms, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
Discover why Meta Platforms (META +6.16%) remains a cash-generative advertising powerhouse, yet still leans heavily on its vast social network and user data for growth. Watch the video below to see how this concentration shapes Meta's long-term investment profile.
*This video was published on Jul. 2, 2026.
Lou Whiteman has no position in any of the stocks mentioned. Matt Frankel, CFP® has no position in any of the stocks mentioned. Toby Bordelon has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and Meta Platforms. The Motley Fool has a disclosure policy.
Meta has shuttered an artificial intelligence image creation feature after just three days, following public backlash.
The tech giant last Tuesday (July 7) introduced a tool that let users generate images using public Instagram accounts. By Friday (July 10), the feature was pulled, after Meta received widespread privacy-related criticism.
“Our intent was to provide a useful creative tool and to give people control over whether their public content could be referenced in this way,” Meta said in a statement shared by Reuters. “We’ve heard the feedback that this feature missed the mark, so it’s no longer available.”
According to Reuters, the feature had faced backlash related to privacy concerns. It had allowed anyone to generate an image of another person by public Instagram username in a prompt. Public accounts had been included by default unless users navigate to a setting to opt out.
As covered here last week, Meta’s own policy states that users “will not be notified about content created using AI features at Meta.” The opt-out also did not apply retroactively, meaning that images generated before a user turns off the setting remain in the system.
“That distinction matters because most users will not find the setting, and some who look for it on launch day could not locate it at all,” PYMNTS wrote.
“Public photos posted for an audience of followers become reusable inputs for AI generation by strangers, advertisers and Meta’s own ad system without any action required from the account holder. The feature is free to use. The identity data powering it belongs to the people who posted it. Whether they agreed to that use is now a question for regulators in multiple jurisdictions.”
According to the Reuters report, SAG-AFTRA, the union representing actors and other media professionals, urged its members and other Instagram users to opt out of the feature.
“Anything other than a clear and conspicuous opt-in for these types of uses of Instagram users’ images is unacceptable, and an utter miscalculation of public sentiment regarding the obvious dangers and harms inherent in such use,” SAG-AFTRA said.
In the wake of Meta’s decision to remove the feature, a spokesperson for the union welcomed the move, calling it “the responsible thing to do.”
As PYMNTS noted last week, this is happening as Meta faces enormous pressure to show that its AI investments are generating revenue. The company in April forecast AI capital expenditures of $115 billion to $135 billion for 2026, almost double last year’s amount.
Meta Platforms (META +6.16%) just closed out quite an eventful week. Shares of the social media giant jumped about 6% on Friday alone as investors warm back up to CEO Mark Zuckerberg's aggressive artificial intelligence (AI) strategy.
The company has given them plenty to work with this year. Growth is accelerating, its new AI lab released its first model this spring, and capital spending guidance now tops $125 billion.
But let's zoom out for a second. How has the stock done over the long haul? Specifically, how much would $10,000 invested in Meta a decade ago be worth today?
Image source: Getty Images.
How the math works out In 2016, Meta -- then still called Facebook -- traded at an average price of about $116 per share. A $10,000 investment at that price would have bought about 86 shares. With the stock trading near $670 as of this writing, those shares would be worth roughly $57,600 today, a nearly sixfold gain.
And dividends sweeten the total a little. Meta initiated its first-ever dividend in early 2024 at $0.50 per share quarterly, and the quarterly payout now stands at $0.525 per share. Those 86 shares would have collected a bit over $400 in dividends so far, bringing the total value to about $58,000.
That works out to a compound annual growth rate of about 19%.
The engine hasn't slowed Of course, none of that return is available to anyone buying today. What matters now is whether the business that produced it is still performing.
What impresses me most is that ten years in, Meta's growth is accelerating, not fading. Revenue rose 22% in 2025 to $201.0 billion, and the growth rate stepped up through the year, from 24% year over year in the fourth quarter to 33% in the first quarter of 2026, when revenue hit $56.3 billion. The formula hasn't changed, either. The company sells more ads, at higher prices, across Facebook, Instagram, WhatsApp, and Messenger. Ad impressions rose 19% year over year in the first quarter, the average price per ad rose 12%, and an average of 3.56 billion people used at least one of Meta's apps each day in March.
All that advertising produces enormous profits. Meta's first-quarter operating income rose 30% year over year to $22.9 billion. And shareholders are seeing plenty of the cash. The company spent over $26 billion on share repurchases in 2025, paid another approximately $5 billion in dividends and dividend equivalents, and still ended the year with more than $81 billion in cash and marketable securities.
And the company is spending like it believes the next decade holds more. Meta recently raised its 2026 guidance for capital expenditures to a range of $125 billion to $145 billion, much of it aimed at AI infrastructure. Its second-quarter outlook, meanwhile, calls for revenue of $58 billion to $61 billion.
"We had a milestone quarter with strong momentum across our apps and the release of our first model from Meta Superintelligence Labs," said Zuckerberg in the company's first-quarter earnings release.
That spending is also the market's biggest worry about the stock. If the AI investments don't pay off in continued growth, today's expense ramp could weigh on profits for years to come. This past week, at least, investors treated the spending as a positive.
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Should investors expect a repeat? Sure, the backtest is fun. But nobody should buy Meta stock expecting another 19% a year for a decade. The company is vastly larger today than it was in 2016, and growth can get harder with size. Additionally, competition for attention and ad dollars isn't easing, and regulators around the world continue to scrutinize the company.
But the stock's price doesn't demand a repeat, either. Shares trade at about 19 times forward earnings -- a reasonable multiple for a company that just grew revenue 33% year over year -- even accounting for the risks of a $125 billion-plus spending plan. That valuation multiple, of course, could come down if growth slows, but this multiple also hardly assumes another decade of dominance.
After all, the lesson of the decade-long backtest isn't that Meta was a once-in-a-generation bargain in 2016. It's that an enormously profitable business kept compounding while plenty of investors found reasons to sell along the way.
For long-term investors, I think Meta remains a solid holding today. I just wouldn't let a $58,000 backtest set my expectations for the next ten years.
Meta Platforms (META +6.16%) is one of the big spenders in the artificial intelligence (AI) race. Its capital expenditures in 2026 will total between $125 billion and $145 billion. At the midpoint, that estimate would be 88% higher than last year's figure.
However, investors have reason to be skeptical that this will result in a meaningful payoff.
CEO Mark Zuckerberg, who currently has a net worth of $231 billion, admitted that the company's AI bets "haven't come to fruition yet." He said that during an internal town hall on July 2, Reuters reported.
The social media stock dipped 5% that day, although it's up 19% in the month of July (as of July 10).
Image source: The Motley Fool.
Not living up to the hype Meta has been one of the fastest companies to commit fully to AI. Earlier this year, the business laid off 8,000 employees, translating to 10% of its workforce. It also moved 7,000 people into different AI roles. One of the goals was to develop and implement AI agents throughout the organization, an objective that so far has failed to live up to expectations.
Zuckerberg said notable progress should be made in the coming months. But based on the immediate negative share-price reaction, investors were less enthusiastic.
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The slow AI headway is giving shareholders flashbacks to late 2021, when the business changed its name from Facebook to Meta Platforms. The company believed that the metaverse would replace mobile internet as the next major computing platform, a strategic pivot that Meta has since scaled back.
Investors haven't been pleased with Reality Labs' financial performance. This segment of Meta posted a cumulative operating loss of $77 billion during the five-year period from the start of 2021 through 2025. But this dollar figure is peanuts compared to the money being allocated to AI.
Zuck's gamble makes sense With a world-class advertising platform and 3.56 billion daily active users across its family of apps, Meta aims to leverage AI not only to boost engagement and drive higher ad revenue, but to also bring personal superintelligence to everyone around the world. This gives the business a different position than its hyperscaler peers, which largely sell AI and other computing capabilities to enterprise clients.
Meta's huge AI spending makes sense, since the company wants to lead the AI revolution from an individual's perspective. However, Zuckerberg's comments about AI progress being slow have three implications for the broader AI secular trend.
It's almost impossible to precisely measure early results from AI implementation, even for a dominant technology business. Worries about AI agents replacing jobs appear to be overblown right now. And no one has any idea what the ultimate payoff will be from the unprecedented AI spending taking place.
When pundits and investors talk about artificial intelligence (AI) hyperscalers, Meta Platforms (META +6.16%) always gets included in the group. However, the other three members of the big four -- Alphabet, Amazon, and Microsoft -- have something in common that Meta doesn't share: cloud computing business units.
Those other three have been monetizing their data centers by leasing capacity to outside clients, while Meta has been self-funding its build-out, and expecting to use all the capacity it can create in-house. There's been no direct monetization path in sight.
However, that may be changing. According to reports, Meta now intends to build a cloud business and lease out its excess AI computing capacity. That's a major shift in policy, as CEO Mark Zuckerberg previously noted that Meta was using all of its capacity for internal workloads.
If Meta is truly launching a cloud computing unit, that could result in a major turnaround for the stock.
Image source: Getty Images.
Cloud computing has transformed these other three companies Cloud computing is a major part of all three of the other hyperscalers' businesses. Take Amazon, for example. While most people think of it as primarily an e-commerce business, nearly 60% of its operating profits come from Amazon Web Services, its cloud computing unit. If Meta does start a cloud business, it's unlikely that it would be as profitable as those of its peers immediately. Still, it would create a new revenue source for the company that would help it fund its ongoing data center build-out.
However, investors also should keep their expectations in check. Zuckerberg has been clear that Meta will only sell its excess computing capacity -- if it has any. So, just because they're likely to get into the cloud business does not mean that a large share of its data centers will be devoted to that purpose, nor that it will build new data centers specifically for external customers. Therefore, we should not expect Meta's cloud computing business unit to be the type of major moneymaker it is for the other three hyperscalers.
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The biggest factor investors are excited about is that Meta is showing a willingness to shift its AI strategy if what it's doing isn't working. The company has been known to stubbornly cling to business ideas that aren't panning out as hoped. This change in practice reflects the flexibility investors want to see, and if the company confirms it during its upcoming second-quarter earnings call on July 29, Meta stock could skyrocket.
Right now, Meta is trading at about 18.7 times forward earnings, a significant discount to the S&P 500 (^GSPC +0.42%), which trades at 21.7 times forward earnings. The company's cloud computing plan could help it close that gap and maybe even lead investors to value it at a premium to the broader market, as its growth rate would certainly indicate it deserves a more generous valuation.
I think Meta is a smart buy now before it reports Q2 earnings, as the stock is still cheap, and a changing AI strategy could be the catalyst that sends it higher.
Keithen Drury has positions in Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.
On July 1, several media outlets reported that Meta Platforms (META +6.16%) was forming a new business unit, internally dubbed "Meta Compute", to sell its excess AI cloud capacity to third-party customers. Meta will reportedly sell both its raw GPU computing capacity and remote access to its infrastructure to companies so they can run their own AI models.
Shares of CoreWeave (CRWV 0.87%), a leading neocloud provider that provides many of the same services, have dropped nearly 11% since that news broke. Does that pullback represent a buying opportunity or a dire warning for the company's future?
Image source: Getty Images.
Why did Meta's strategic shift crush CoreWeave's stock? Meta's strategic shift surprised CoreWeave's investors, since Meta had just agreed to pay CoreWeave $21 billion through 2032 for its neocloud services this April. Meta also struck a similar multi-billion dollar deal with another neocloud company, Nebius (NBIS +1.60%).
Therefore, it might initially seem odd for Meta to sell its own cloud computing power when it clearly needs it. Meta's agreements with CoreWeave and Nebius also prohibit it from reselling any of that cloud computing power, so it can only sell the excess AI cloud capacity at its own first-party data centers.
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However, Meta plans to invest up to $145 billion this year in expanding its own AI infrastructure. As it builds more data centers, some of those servers will remain idle until they're fully utilized by its social networking platforms and AI services.
To avoid wasting too much cash and energy on underutilized servers, Meta wants to rent them out to third parties -- a move that could transform it into a formidable competitor to companies like CoreWeave and Nebius. CoreWeave's other major customers, such as Jane Street and IBM (NYSE: IBM), could also eventually follow the same playbook if they decide to expand their cloud infrastructure.
On the bright side, CoreWeave's largest customer -- Microsoft (MSFT +0.15%) -- probably won't do the same thing because it's already one of the world's biggest cloud infrastructure companies. Instead, CoreWeave will continue to serve as an "overflow tank" for its cloud services.
Does the pullback represent a buying opportunity? From 2025 to 2028, analysts expect CoreWeave's revenue to surge from $5.1 billion to $40.3 billion as its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) soars from $3.1 billion to $25.7 billion. With an enterprise value of $91.2 billion, it still looks like a bargain at 7 times and 13 times this year's revenue and adjusted EBITDA, respectively.
Meta's move is alarming, but it doesn't break the bullish thesis for CoreWeave. Even if Meta sells its idle computing power to cut costs, it doesn't indicate that other companies will eagerly tether themselves to the social media giant's infrastructure. Instead, independent neocloud players like CoreWeave and Nebius should remain appealing choices as the AI market expands -- so this pullback could be a great buying opportunity.
Leo Sun has positions in Meta Platforms. The Motley Fool has positions in and recommends International Business Machines, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.
Meta has said it is discontinuing an AI feature launched this week that allowed users to generate images using public Instagram accounts, after drawing widespread criticism over privacy concerns, including from a Hollywood union.
“Our intent was to provide a useful creative tool and to give people control over whether their public content could be referenced in this way,” Meta said in a statement.
“We’ve heard the feedback that this feature missed the mark, so it’s no longer available,” it said.
Meta, owner of Facebook and Instagram, had launched Muse Image on Tuesday, its first image-generation model from Meta Superintelligence Labs. The feature, integrated into its Meta AI chatbot, can use photos as input and lets users edit generated images directly through sketches.
The feature soon faced backlash over privacy concerns and being an automatic opt-in for users.
Emmy-winning actor Hannah Einbinder, known for Hacks, criticised the feature on Instagram, saying it had been turned on automatically and urging users to turn it off.
SAG-AFTRA, the union representing actors and other media professionals, also urged members and other Instagram users on Thursday to opt out of the feature.
“Anything other than a clear and conspicuous opt-in for these types of uses of Instagram users’ images is unacceptable, and an utter miscalculation of public sentiment regarding the obvious dangers and harms inherent in such use,” SAG-AFTRA said.
Following Meta’s decision to remove the feature, SAG-AFTRA welcomed the move.
“With the dangers of nonconsensual digital replicas well known to all, a feature that encouraged that behavior is unwise. We appreciate its discontinuance. It is the responsible thing to do,” a union spokesperson said.
The reversal reflects increasing pressure on technology companies to give users clear control over how their publicly shared content is used by AI features.
Shares of Meta Platforms (META +6.16%) rose about 6% on Friday after Reuters reported on Thursday that the social media giant plans to start manufacturing its own data-center AI (artificial intelligence) chip in September. The chip, code-named Iris, was designed with help from Broadcom (AVGO 0.31%) and will be built by Taiwan Semiconductor Manufacturing (TSM 0.55%), according to an internal memo the news organization reviewed.
The market's enthusiasm is easy to understand. Meta expects to spend as much as $145 billion on AI infrastructure this year, and that spending has been my biggest concern with the stock. Custom silicon is aimed squarely at getting more computing power out of every one of those dollars.
So, what does Meta's expanding chip program mean for the stock?
Image source: Getty Images.
The chip program is moving fast Iris is reportedly part of a four-generation family of chips Meta is designing in-house, and the program appears to be ahead of where many investors probably assumed. Testing on the chip took about six weeks and turned up no major issues, according to the memo.
Even more, Meta reportedly plans to launch a new chip about every six months through 2027. That is a much faster cadence than the industry norm of about one new chip per year.
And the infrastructure these chips would support is enormous. Meta plans to bring about 7 gigawatts of computing capacity online this year and double its total to 14 gigawatts in 2027, according to the report, with Iris augmenting the graphics processing units (GPUs) the company buys from Nvidia and Advanced Micro Devices rather than replacing them.
Still, there's a message here for chip investors. One of the AI boom's biggest spenders just showed a credible path to needing Nvidia somewhat less over time -- while handing more business to Broadcom, which helps design the chip, and TSMC, which builds it.
Nvidia's chips remain the backbone of Meta's computing plans. But every in-house chip Meta deploys is pricing pressure Nvidia could eventually feel.
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The business paying the bill None of this spending would matter much to shareholders if Meta's core business were sputtering. It isn't.
Meta's first-quarter revenue rose 33% year over year to $56.3 billion -- an acceleration from 24% growth in the fourth quarter of 2025 and 22% growth for full-year 2025. And the profits followed. The company posted a 41% operating margin for the period, and earnings per share of $10.44 grew 62% year over year, though a one-time $8.03 billion tax benefit added $3.13 per share to that figure. For a company of Meta's size, growth like this is extraordinary.
"We had a milestone quarter with strong momentum across our apps and the release of our first model from Meta Superintelligence Labs," said CEO Mark Zuckerberg in the company's first-quarter earnings release.
That growth is what pays for the build-out. In its first-quarter update, Meta raised its 2026 capital expenditure forecast to a range of $125 billion to $145 billion (up from a prior range of $115 billion to $135 billion) while guiding for second-quarter revenue of $58 billion to $61 billion. Capital expenditures in the first quarter alone were $19.8 billion.
Of course, custom chips don't mean a smaller budget. And a reported timeline may still slip. Even if Iris works exactly as planned, Meta isn't cutting its spending. It's doubling its computing capacity and trying to make each unit of that capacity cost less. If the AI investments don't ultimately produce more engagement and better ad economics, in-house silicon may not be enough to offset challenges the company could face down the road.
But the price investors are paying for this story looks reasonable. At about $672 per share as of this writing, Meta trades at about 24 times earnings and about 19 times forward earnings, even though Meta grew revenue 33% last quarter. And unlike a chip supplier, Meta also controls the applications that all of that computing power serves. If the in-house chips deliver even part of the potential savings, the company's heavy spending could convert into earnings growth faster than the market currently expects.
To me, the stock looks attractive here. Sure, Thursday's report probably doesn't lower Meta's AI bill. But it strengthens the case that the company can control the cost of a build-out it was going to attempt anyway.
People walk behind a logo of Meta Platforms company, during a conference in Mumbai, India, September 20, 2023. REUTERS/Francis Mascarenhas Purchase Licensing Rights, opens new tab
July 10 (Reuters) - Meta (META.O), opens new tab said on Friday it is discontinuing an AI feature launched this week that allowed users to generate images using public Instagram accounts, after drawing widespread criticism over privacy concerns, including from a Hollywood union.
"Our intent was to provide a useful creative tool and to give people control over whether their public content could be referenced in this way," Meta said in a statement.
Learn about the latest breakthroughs in AI and tech with the Reuters Artificial Intelligencer newsletter. Sign up here.
"We've heard the feedback that this feature missed the mark, so it's no longer available," it said.
Meta, owner of Facebook and Instagram, had launched Muse Image on Tuesday, its first image-generation model from Meta Superintelligence Labs. The feature, integrated into its Meta AI chatbot, can use photos as input and lets users edit generated images directly through sketches.
The feature soon faced backlash over privacy concerns and being an automatic opt-in for users.
Emmy-winning actor Hannah Einbinder, known for "Hacks," criticized the feature on Instagram, saying it had been turned on automatically and urging users to turn it off.
SAG-AFTRA, the union representing actors and other media professionals, also urged members and other Instagram users on Thursday to opt out of the feature.
"Anything other than a clear and conspicuous opt-in for these types of uses of Instagram users' images is unacceptable, and an utter miscalculation of public sentiment regarding the obvious dangers and harms inherent in such use," SAG-AFTRA said.
Following Meta's decision to remove the feature, SAG-AFTRA welcomed the move.
"With the dangers of nonconsensual digital replicas well known to all, a feature that encouraged that behavior is unwise. We appreciate its discontinuance. It is the responsible thing to do," a union spokesperson said.
The reversal reflects increasing pressure on technology companies to give users clear control over how their publicly shared content is used by AI features.
Reporting by Natalia Bueno Rebolledo and Mrinmay Dey in Mexico City; Editing by Edmund Klamann and Tom Hogue
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Meta has axed a controversial feature that allowed users to modify photos from public Instagram accounts using AI. The feature, which was rolled out earlier this week along with a batch of other AI tools, “missed the mark” and is no longer available, according to the company.
Earlier this week, Meta announced Muse Image, a new AI image generator built by Meta Superintelligence Labs, its dedicated AI unit. Meta promoted one feature that allowed individuals to generate images by @-mentioning public Instagram accounts that they wanted to reference. The feature, which wasn’t designed to alert a user if their photos were used in this way, prompted immediate backlash.
TechCrunch wrote its own guide on how to disable the feature.
Now Meta has reversed course. The company issued a blog post Friday announcing that it was removing the feature. Puck News founding partner Dylan Byers was the first to share the company’s decision.
“Our intent was to provide a useful creative tool and to give people control over whether their public content could be referenced in this way,” the company posted on its blog. “We’ve heard the feedback that this feature missed the mark, so it’s no longer available.”
TechCrunch reached out to Meta for more information and will update this article if it responds.
Since its integration with social media platforms, AI has been misused with wild abandon — often to generate naked images of female celebrities. Platforms have attempted to mitigate this trend, although the guardrails introduced have often fallen short.
In the case of Meta’s newly nixed feature, it seems somewhat obvious that it would have been abused in this way. Indeed, Byers notes that the decision to do away with the feature came “amid scrutiny from users and talent agencies, including CAA.”
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Lucas is a senior writer at TechCrunch, where he covers artificial intelligence, consumer tech, and startups. He previously covered AI and cybersecurity at Gizmodo. You can contact Lucas by emailing [email protected].
It's been a tough year for Meta Platforms (META +6.16%) shareholders. The social media and artificial intelligence (AI) specialist has lagged the broader market, with the stock down 9% over the past year (as of market close on Thursday), compared to 21% gains for the S&P 500.
The biggest headwind has been fears about Meta's significant AI-related spending, as investors fear the costs will squeeze the company's profits and ultimately outweigh the benefits.
However, I believe the sell-off has gone too far. Numerous catalysts could send Meta stock soaring over the past year, and I don't think investors have been keeping track. Let's look at these drivers and why I think Meta Platforms is a screaming buy right now.
Image source: The Motley Fool.
1. Head in the clouds The tech world was rocked last week when rumors surfaced that Meta is developing a cloud infrastructure business, according to a Bloomberg report. This would put the company in direct competition with industry leaders Amazon Web Services (AWS), Microsoft Azure, and Alphabet's Google Cloud.
One of the key advantages for cloud operators, aside from selling on-demand computing capacity, has been the built-in market for selling AI models. Amazon Bedrock, Google Cloud Vertex AI, and Azure AI Foundry give customers access to top-tier AI models and services without the need to spend heavily on underlying infrastructure. This has given the Big Three cloud providers a significant advantage over Meta. If the company develops its own cloud service, that would level the playing field.
Meta has been investing heavily in data centers to support its AI ambitions. Having an outlet to sell excess cloud capacity and peddle its homegrown models would be a boon to Meta and take its AI strategy to the next level.
2. Significantly lower AI infrastructure costs One of the biggest question marks hanging over Meta this year is the company's aggressive AI-related capex spending. In the first quarter, Meta raised its forecast, saying it expects spending to be in a range of $125 billion to $145 billion, up from its previous range of $115 billion to $135 billion. Much of this spending will advance its data center build-out to support its AI ambitions. Some investors fear Meta's spending will outpace the returns from the company's massive investment.
However, Meta's AI infrastructure build-out is much more cost-effective than expected, according to BofA analyst Justin Pope. The company is working to deliver an additional 14 gigawatts (GW) by the end of next year, with 1GW already online. The analyst originally estimated Meta's cost per GW at $45 billion, but an internal Meta memo suggests the cost is closer to $22 billion. If those figures are "even close to accurate, Meta may have engineered significant cost savings" that are well below Wall Street's expectations, according to the analyst.
Moreover, the company has joined forces with Broadcom to develop a suite of Meta Training and Inference Accelerator (MTIA) chips. These specialized processors would be designed to be more efficient for specific tasks, thereby reducing AI-related operating costs. The first of these custom chips, dubbed "Iris," is scheduled to begin production in September, according to reports.
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3. Muse Spark reception After the tepid reception to its Llama 4 AI model last year, Meta took a step back to regroup. Just this week, the company released Muse Spark 1.1, and early reviews suggest the company has a hit on its hands. The latest multimodal AI -- which powers the Meta AI assistant -- offers advanced reasoning and can handle complex processes. The recent update also offers agentic coding, or the ability to write, test, and debug code with minimal human involvement.
While these latest models still lag those from OpenAI and Anthropic, Meta has significantly narrowed the lead with Muse Spark. Moreover, the cost of use is lower than that of the leaders, as CEO Mark Zuckerberg has promised "aggressive" pricing and a "much more affordable cost" for its frontier model. Developers testing Muse Spark will be able to use it for free, though they will be forced to pay beyond a certain use threshold.
The creation of this next-generation AI model catapults Meta into the big leagues, and its aggressive pricing will no doubt attract serious users.
Despite these significant developments and its expanding opportunity, Meta still trades at a discount to many of its Magnificent Seven rivals. The stock is currently selling for less than 23 times earnings (as of market close on Thursday).
That's an attractive price for a company with so many ways to win, which is why I believe Meta Platforms is a screaming buy right now.
Bank of America is an advertising partner of Motley Fool Money. Danny Vena, CPA has positions in Alphabet, Amazon, Broadcom, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Broadcom, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.
Meta has launched its first AI image generator – and it has automatically enrolled Instagram accounts, meaning anyone on the internet can use your photos unless you turn off the feature.
Meta’s Superintelligence Labs on Tuesday introduced Muse Image, a bot meant to compete with OpenAI’s ChatGPT Images 2.0 and Google’s Nano Banana 2.
The new model has been folded into Instagram and automatically opts-in all public accounts on Instagram – meaning anyone can simply tag your username in an AI prompt and use Muse Image to generate an image using your likeness.
Meta has launched its first AI image generator – and it has automatically enrolled Instagram accounts. ink drop – stock.adobe.com Instagram accounts will not be notified about content created using AI features, according to Meta – so your photos and videos could be remixed and transformed by other users without your knowledge.
How to turn off the feature Instagram users with private accounts are not opted-in to the new model, so you can switch your account’s status from public to private.
If you’d like to keep your account public, you’ll have to turn off the feature in the app’s settings.
The first step is to make sure your Instagram app is updated. Otherwise, the option to turn off the feature will not be available.
Open the Instagram app, tap on your profile and then tap the three lines in the top-right corner of the screen, which say “Menu.”
Scroll to “How others can interact with you” and tap “Sharing and reuse.”
Meta’s Superintelligence Labs on Tuesday introduced Muse Image. REUTERS Below “Allow people to reuse your content on Instagram and with AI features at Meta,” tap the “Toggle off” button to turn off access to your posts.
Switching your account to private or toggling off the feature will only prevent new images from being generated, so any AI images already created by other users with your content will not be deleted.
What is Muse Image? The AI generation bot is first rolling out across the US.
If users do not opt-out of Muse Image, then anyone on Instagram can create an AI-generated image using all or part of your photos, Reels and feed videos.
In a blog post, Meta marketed Muse Image as a helpful tool to “design a custom event invitation, mock up a collaborative creative concept, or generate a personalized graphic.”
The bot can also be used “to place your pet in a famous painting or combine a selfie with a vacation photo to create a custom postcard,” the company said.
Meta did not immediately respond to The Post’s inquiry about why public accounts are automatically opted in.
Deepfake controversies Elon Musk’s chatbot, Grok, is facing a class-action lawsuit and an EU privacy investigation after its AI image-generation feature allowed users to “nudify” images of real women and children on social-media platform X.
Apple reportedly privately threatened to remove Grok from its App Store in January over the deepfake controversy.
Artificial intelligence could reshape the jobs of nearly 80 million workers across Southeast Asia, but the International Labour Organization found little eviden
Characteristics and Risks of Standardized Options: https://bit.ly/2v9tH6D. The positives outweigh the negatives when it comes to Meta Platforms (META), argues Kevin Hincks.
ToplineMark Zuckerberg’s net worth increased by $12 billion on Friday as Meta’s stock concluded its best weekly performance in more than two years, following the debut of a new AI model and reported plans for the Facebook parent to develop in-house AI chips.
The Facebook parent’s stock saw a positive investor reaction to its new AI model and reported plans for in-house AI chips.
Getty Images
Key FactsMeta jumped 6% on Friday to just under $670, extending a more than 14% rally for the stock over the week, its best five-session performance since a 20.5% surge the week ending Feb. 2, 2024, according to FactSet data.
The latest boost in Meta shares added $12.7 billion to Zuckerberg’s net worth, valued at $229.3 billion, as he ranks No. 6 in the world behind No. 5 Michael Dell ($241.3 billion) and No. 4 Jeff Bezos ($255.2 billion), according to Forbes estimates (for the rest, see our Real-Time Billionaire List).
This week Meta rolled out Muse Image, a new AI model to be used as a tool for creating images, and the latest update to its foundational AI model Muse Spark, which Meta claimed is a “significant upgrade” that makes the model better at coding, using software tools and understanding texts and images together.
On Thursday, Meta’s shares rallied by 4.7% after Reuters reported the company planned to start producing an in-house AI chip by September.
Bank of America Analyst Justin Post applauded Meta’s chip plans, writing in a note that the company may have found a way to build or operate its AI infrastructure much more cheaply than Wall Street expected.
contraMeta has faced backlash for its Muse Image tool from Hollywood unions, talent agencies and cybersecurity firms over privacy concerns. Instagram’s implementation of the tool allowed users to create AI content based on images posted by public accounts, which are not notified when their posts are used for image generation, and users are automatically opted into the program. SAG-AFTRA, a major Hollywood union representing more than 160,000 actors and entertainment industry professionals, urged its members to opt out of the tool late Thursday, while talent agency Creative Arts Agency called for Meta to make the feature opt-in, not opt-out. Cybersecurity firm Malwarebytes warned the tool could be used for “impersonation, scams, or other abuse.” Meta, in response to criticism, said in a statement that users under 18 were automatically opted out and that it will “take action” against content that violates its community standards.
what to watch forMeta is expected to report quarterly earnings by the end of the month. The company is expected to report a nearly 7% boost in revenue quarter-to-quarter, but a 31% downturn in earnings per share, according to FactSet. Meta’s $10.44 earnings per share through its first quarter were boosted by a one-time $8 billion tax benefit.
key backgroundInvestors poured into Meta’s stock to open the year as shares briefly peaked in late January before stumbling to a low in March. That monthlong decline came as Meta was struck by a pair of landmark court rulings, one of which found Meta and Google liable for harming a woman’s mental health because of addictive design features on their platforms, and the brief closure of its metaverse. At the time, Meta also reportedly delayed the release of its AI model after it failed to outperform AI models from rivals OpenAI, Google and Anthropic in benchmark tests. The stock has since rebounded by more than 28% as Meta has ramped up production of its AI products, including Muse Spark and Muse Image.
further readingForbesInstagram’s New AI Update Faces Blowback From Hollywood, Cybersecurity CompaniesBy Conor MurrayForbesMeta’s Rare Selloff Deepens After Court Losses, AI Delays And Metaverse’s DeclineBy Ty Roush
It was another interesting week for the tech trade, as Sam Vadas discusses her top takeaways Meta Platforms' (META) strong run, and SK Hynix's (SKHYV) Nasdaq debut. ======== Schwab Network ======== Empowering every investor and trader, every market day.
Comprehensive cross-platform coverage of the U.S. market close on Bloomberg Television, Bloomberg Radio, and YouTube with Romaine Bostick, Katie Greifeld, Carol Massar and Isabelle Lee. -------- More on Bloomberg Television and Markets Like this video?
Meta Platforms Inc. (NASDAQ:META) shares are gaining Friday. Citizens and Piper Sandler both weighed in on the stock. Here’s what you need to know.
Meta Platforms shares are climbing with conviction. What’s behind META gains? Citizens: A New Revenue Stream Takes ShapeThe firm also sees API revenue as a potential billion-dollar business for Meta on its own. Using Anthropic’s roughly $47 billion annualized revenue run rate as a benchmark, Boone estimates that even a 5% share of a comparable API opportunity would translate to around $2 billion in annualized revenue for Meta.
Piper Sandler: Still the Top Large-Cap PickPiper Sandler analyst Thomas Champion separately reiterated an Overweight rating and held his price target at $800, keeping Meta as his top large-cap pick. Champion cited the combination of durable revenue growth and what he views as an attractive valuation as the foundation of his conviction.
His note flags second-quarter revenue of approximately $61 billion and a third-quarter outlook of $61 billion to $64 billion as the key financial markers to watch heading into earnings, alongside updates on Meta’s capital spending trajectory for 2026 and 2027, the rollout of its Business Agents product on WhatsApp and the expected debut of a new cloud infrastructure business.
META Shares Are FlyingMETA Price Action: Meta shares were up 5.92% at $668.86 at the time of publication on Friday, according to Benzinga Pr.
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