Meta

Facebook parent Meta continues post-election ban on new political ads

Meta has announced an extended ban on new political ads following the United States election, aiming to counter misinformation in the tense post-election period. In a blog post on Monday, the Facebook parent company explained that the suspension will remain in place until later in the week, preventing any new political ads from being introduced immediately after the election. Ads that were served at least once before the restriction will still be displayed, but editing options will be limited.

Meta‘s decision to extend its ad restriction is part of its ongoing policy to help prevent last-minute claims that could be difficult to verify. The social media giant implemented a similar measure in the last election cycle, underscoring the need for extra caution as elections unfold.

Last year, Meta also barred political advertisers and regulated industries from using its generative AI-based ad products, reflecting a continued focus on reducing potential misinformation through stricter ad controls and ad content regulations.

South Korea fines Meta $15.7 million for privacy violations

South Korea’s data protection agency has fined Meta Platforms, the owner of Facebook, 21.62 billion won ($15.67 million) for improperly collecting and sharing sensitive user data with advertisers. The Personal Information Protection Commission found that Meta gathered details on nearly one million South Korean users, including their religion, political views, and sexual orientation, without obtaining the necessary consent. This information was reportedly used by around 4,000 advertisers.

The commission revealed that Meta analysed user interactions, such as pages liked and ads clicked, to create targeted ad themes based on sensitive personal data. Some users were even categorised by highly private attributes, including identifying as North Korean defectors or LGBTQ+. Additionally, Meta allegedly denied users’ requests to access their information and failed to secure data for at least ten users, leading to a data breach.

Meta has not yet issued a statement regarding the fine. This penalty underscores South Korea’s commitment to strict data privacy enforcement as concerns over digital privacy intensify worldwide.

Meta boosts green energy with 260 MW solar deal from Engie

Meta Platforms has signed an agreement to purchase the full output of a new solar power plant from French utility giant Engie. The Sypert solar plant, expected to generate 260 megawatts of clean energy, is scheduled to go live in late 2025. This partnership aligns with Meta’s ongoing commitment to meet the energy demands of its expanding data centre operations with sustainable power sources.

The Sypert plant will add to Engie’s growing renewable energy portfolio, which currently includes about 8 gigawatts of solar, wind, and battery storage projects across North America. Earlier this month, Engie also secured a solar power agreement with Google for its largest US solar project, reinforcing the company’s role as a major clean energy supplier for tech firms.

Driven by technologies like AI, the demand for data centre power in the US is predicted to triple by 2030, according to Goldman Sachs. The Biden administration has called on tech companies to invest in green energy to support this growth, and partnerships like Meta and Engie’s reflect this broader push toward a more sustainable digital economy.

The US federal agency investigates how Meta uses consumer financial data for targeted advertising

The Consumer Financial Protection Bureau (CFPB) has informed Meta of its intention to consider ‘legal action’ concerning allegations that the tech giant improperly acquired consumer financial data from third parties for its targeted advertising operations. This federal investigation was revealed in a recent filing that Meta submitted to the Securities and Exchange Commission (SEC).

The filing indicates that the CFPB notified Meta on 18 September that it evaluated whether the company’s actions violate the Consumer Financial Protection Act, designed to protect consumers from unfair and deceptive financial practices. The status of the investigation remains uncertain, with the filing noting that the CFPB could initiate a lawsuit soon, seeking financial penalties and equitable relief.

Meta, the parent company of Instagram and Facebook, is facing increased scrutiny from regulators and state attorneys general regarding various concerns, including its privacy practices.

In the SEC filing, Meta disclosed that the CFPB has formally notified the company about an investigation focusing on the alleged receipt and use for advertising of financial information from third parties through specific advertising tools. The inquiry targets explicitly advertising related to ‘financial products and services,’ although it remains to be seen whether the scrutiny pertains to Facebook, Instagram, or both platforms.

While a Meta spokesperson refrained from commenting on the matter, the company stated in the filing that it disputes the allegations and believes any enforcement action would be unjustified. The CFPB also opted not to provide additional comments.

Amid this scrutiny, Meta recently reported $41 billion in revenue for the third quarter, a 19 percent increase from the previous year. A significant portion of this revenue is generated from its targeted advertising business, which has faced criticism from the Federal Trade Commission (FTC) and European regulators for allegedly mishandling user data and violating privacy rights.

In 2019, Meta settled privacy allegations related to the Cambridge Analytica scandal by paying the FTC $5 billion after it was revealed that the company had improperly shared Facebook user data with the firm for voter profiling. Last year, the European Union fined Meta $1.3 billion for improperly transferring user data from Europe to the United States.

Big Tech AI investments test investor patience

Leading tech giants are racing to expand their AI infrastructure, with companies like Microsoft, Meta, and Amazon dedicating billions to meet rising demand. However, the heavy spending on data centres and computing power is sparking concern among investors who are eager for quicker returns. Big Tech’s significant capital investments come with mounting costs, threatening profitability and raising questions about how quickly these ventures will yield results.

Despite exceeding recent earnings forecasts, Big Tech stocks dropped on Thursday, underlining the pressure they face to balance AI expansion with shareholder expectations. Microsoft and Meta reported increased spending in their latest quarters, yet their shares fell, with Microsoft dropping 6% and Meta 4%. Amazon’s shares saw a brief dip before recovering on news of a strong third-quarter performance. Analysts point to a challenging road ahead as these firms juggle AI ambitions with market demands for near-term gains.

The challenges extend to capacity issues, with firms like Microsoft struggling to keep up with demand due to data centre constraints. Meanwhile, Meta forecasts that its AI-related expenses will increase significantly next year, and chip manufacturers like Nvidia and AMD are racing to fulfil orders. This supply bottleneck highlights the complex task of scaling up AI services, adding a layer of unpredictability to Big Tech’s efforts.

Despite short-term risks, companies remain committed to AI. Amazon CEO Andy Jassy described AI as a “once-in-a-lifetime” opportunity, while Meta’s Mark Zuckerberg likened today’s investment climate to the early days of cloud computing. As firms continue to ramp up infrastructure spending, they are counting on long-term returns, hoping to transform initial scepticism into eventual success.

Chinese military adapts Meta’s Llama for AI tool

China’s People’s Liberation Army (PLA) has adapted Meta’s open-source AI model, Llama, to create a military-focused tool named ChatBIT. Developed by researchers from PLA-linked institutions, including the Academy of Military Science, ChatBIT leverages an earlier version of Llama, fine-tuned for military decision-making and intelligence processing tasks. The tool reportedly performs better than some alternative AI models, though it falls short of OpenAI’s ChatGPT-4.

Meta, which supports open innovation, has restrictions against military uses of its models. However, the open-source nature of Llama limits Meta’s ability to prevent unauthorised adaptations, such as ChatBIT. In response, Meta affirmed its commitment to ethical AI use and noted the need for US innovation to stay competitive as China intensifies its AI research investments.

China’s approach reflects a broader trend, as its institutions reportedly employ Western AI technologies for areas like airborne warfare and domestic security. With increasing US scrutiny over the national security implications of open-source AI, the Biden administration has moved to regulate AI’s development, balancing its potential benefits with growing risks of misuse.

Meta beats earnings estimates but warns of rising AI expenses

Meta Platforms exceeded third-quarter profit and revenue estimates, reporting a profit of $6.03 per share, compared to the projected $5.25. Revenue reached $40.59 billion, just ahead of analysts’ forecasts. However, the company warned of increased infrastructure expenses tied to its AI ambitions, prompting a 2.9% dip in after-hours trading.

The company is navigating heavy spending on AI infrastructure to support new technologies, setting it apart from cloud service providers who typically profit more directly from similar investments. Meta’s expenses for the quarter totalled $23.2 billion, with capital expenditure at $9.2 billion. While it adjusted its annual expense forecast to $96-98 billion, it foresees a rise in depreciation and operating costs due to its expanding data centre fleet.

Meta’s core ad business remains essential to covering its AI investments, and analysts believe holiday ad spending could bolster the company’s earnings further. In the third quarter, Meta’s daily active users across its app family grew 5% to 3.29 billion, while its Reality Labs division saw losses of $4.4 billion, slightly better than expected.

Big Tech boosts AI investments amid Wall Street pressure

Big technology firms, including Microsoft and Meta, are significantly increasing their investments in AI data centres to meet soaring demand, but Wall Street is looking for quicker returns on these expenditures. Both companies reported rising capital expenses due to their AI initiatives, with Alphabet also indicating that its costs would remain elevated. Amazon is expected to follow suit in its upcoming earnings report.

This surge in capital spending could impact profit margins, causing concern among investors. Shares of major tech companies, including Meta and Microsoft, fell by around 4% in premarket trading, despite reporting better-than-expected profits for the July-September quarter. Analysts warn that while the race to build AI capacity is intensifying, it will take time for these investments to yield returns.

Microsoft’s capital expenditures for a single quarter now surpass its total annual spending from prior years. The company noted a 5.3% increase in spending, amounting to $20 billion, while also predicting further increases related to AI. However, they warned of potential slowdowns in growth for their Azure cloud business due to data centre capacity constraints. Similarly, Meta anticipates a “significant acceleration” in AI infrastructure costs next year.

The tech industry is experiencing bottlenecks, particularly as chipmakers like Nvidia struggle to keep up with the demand for AI chips. Advanced Micro Devices has also reported that AI chip demand is outpacing supply, limiting growth potential. Despite these challenges, both Microsoft and Meta maintain that it is still early in the AI cycle and emphasise the long-term benefits of their investments, echoing earlier experiences during the development of cloud technology.

Google faces new challenge as Meta builds AI search tool

Meta is working on a new AI search engine to lessen its reliance on Google and Microsoft’s Bing. The move places Meta among other tech giants, such as OpenAI, Google, and Microsoft, in the race to dominate the evolving AI-powered search landscape.

The new search tool aims to enhance Meta’s chatbot on WhatsApp, Instagram, and Facebook by offering conversational responses to real-time queries about news and events. Meta currently depends on Google and Bing to provide users with information on topics like news, stock markets, and sports.

As competition intensifies, Google is pushing its Gemini AI model into core services, including Search, to offer more interactive and intuitive experiences. OpenAI, meanwhile, continues to use Bing, leveraging its close partnership with Microsoft for topical queries.

The use of web data to train AI systems and build search engines has sparked debates about copyright and fair compensation. Meta recently announced that its chatbot would incorporate Reuters content to provide up-to-date answers to questions related to news and current events.

Meta opposes Malaysia’s new social media licensing requirements

Meta Platforms has expressed concerns over Malaysia’s plan to require social media platforms to obtain regulatory licenses by 1 January 2025. The Malaysian government’s new regulation aims to combat online threats like scams, cyberbullying, and sexual crimes. However, Meta’s director of public policy for Southeast Asia, Rafael Frankel, criticised the timeline, arguing it’s ‘exceptionally accelerated’ and lacks clear guidelines, potentially hindering digital innovation and economic growth.

Malaysia announced in July that any social media or messaging service with over eight million users would need to comply or face legal repercussions. The policy has sparked backlash from industry groups, including Meta, which asked the government in August to reconsider. Communications Minister Fahmi Fadzil reiterated that tech companies must align with local laws to continue operating in Malaysia, signalling no plans for delay.

Frankel emphasised that Meta has yet to decide whether to apply for the license due to the vague regulatory framework, pointing out that similar regulations typically take years to finalise to avoid stifling innovation. While Malaysia’s communications ministry has yet to comment, Fahmi recently met with Meta representatives, thanking them for their cooperation but urging more action against harmful content, particularly regarding minors.

Meta has stated its shared commitment to online safety and is collaborating with Malaysian authorities to remove harmful content. Frankel argued that Meta already prioritises online safety and doesn’t require a licensing framework. Despite ongoing concerns, Meta hopes to work with the government to find a middle ground on the regulations before implementation.

Why does it matter?

Malaysia’s strict stance on harmful online content comes in response to a rise in social media-related issues. The government has been vocal about requiring platforms like Meta and TikTok to intensify content monitoring, especially around gambling, scams, child protection, cyberbullying, and sensitive topics related to race, religion, and royalty.