Two trials, two losses: Meta held accountable for harming kids
In a pair of firsts, Meta wound up on the losing side of two landmark jury decisions this week related to the abuse of underage users and addictive features on its platforms.
On Tuesday, a state court jury in Santa Fe, New Mexico, ordered Meta to pay $375 million in civil penalties after finding that it knowingly endangered the well-being of children who use its platforms. The jury sided with the state’s case that Meta, which owns Facebook, Instagram, and WhatsApp, had misled the public about the safety of its products and the extent of child sexual exploitation that has occurred across its platforms. The verdict marked the company’s first courtroom defeat related to child safety.
“Meta executives knew their products harmed children, disregarded warnings from their own employees, and lied to the public about what they knew,” said New Mexico attorney general Raul Torrez, who filed the lawsuit against Meta. “Today the jury joined families, educators, and child safety experts in saying enough is enough.”
One day after the New Mexico verdict, a jury in California Superior Court in Los Angeles found that Meta’s negligence and addictive features had harmed the mental health of a 20-year-old woman who began using Facebook and Instagram as a child. Meta was found liable for $4.2 million in combined compensatory and punitive damages. YouTube, the other defendant in the lawsuit, was ordered to pay $1.8 million.
Lawyers for the plaintiff, referred to as KGM, said their client was hooked by features that Meta deploys to keep users on its platforms, including recommendation algorithms and an endless scroll of content.
While verdicts in both cases will not require Meta to overhaul its policies or features, they could pressure the company to make changes, particularly given the number of similar lawsuits it is facing. Additionally, in New Mexico, the second phase of the trial, scheduled for next month, would provide the opportunity for a judge to order changes if they find that Meta’s platforms pose a public nuisance.
This Week in Zuck:
Meta chief executive Mark Zuckerberg is building an AI “CEO agent” to assist him in his work, according to a report from The Wall Street Journal. The story, however, provided few specifics about what tasks the agent would actually do, aside from “helping Zuckerberg get information faster.” (Wall Street Journal)
While recalling his first time meeting Zuckerberg, Y Combinator cofounder Paul Graham said, “[Zuckerberg] has this weird thing where if he didn’t have anything to say, he wouldn’t fill the gap with passing conversation. He had no concept of small talk.” Graham continued: “It was surprisingly disconcerting. I didn’t realize how important small talk was until I met the lack of it. But he would just stare at you if there wasn’t anything [to say].” (Fortune)
Meta laid off roughly 700 employees on Wednesday as it continues to look for ways to free up more cash to spend on AI. The layoffs came less than a day after Meta introduced a new stock compensation program to further enrich six of its top executives. (New York Times)
Zuckerberg and Ellison — but not Musk — appointed to new White House tech council
Donald Trump has launched a new technology advisory council comprising numerous billionaires, including Mark Zuckerberg, Google cofounder Sergey Brin, Oracle founder Larry Ellison, NVIDIA CEO Jensen Huang, AMD CEO Lisa Su, and venture capitalist Marc Andreessen.
The President’s Council of Advisors on Science and Technology, or PCAST, was established via an executive order with the stated goal of bringing together “the Nation’s foremost luminaries in science and technology to advise the President and provide recommendations on strengthening American leadership in science and technology,” per a White House press release. The council will be chaired by David Sacks, Trump’s AI and crypto czar, and White House science adviser Michael Kratsios.
Laura Loomer, a right-wing influencer and informal Trump advisor, was not pleased with Zuckerberg’s addition, describing it as a “slap in the face to MAGA.”
There was one notable omission from the council: Elon Musk, a former top administration official who left Washington last summer amid a public feud with the president. However, it appeared that the two men had resolved their issues late last year, raising questions about why Musk was excluded from an advisory council that includes many of his peers. The White House has said that the council will continue to bring on new members.
Jury finds Musk misled Twitter investors
Last week, a jury in a San Francisco federal court found that Twitter investors suffered financial losses directly attributable to Elon Musk after he threatened to walk away from his 2022 deal to acquire the social media company.
At the time, Musk — in an attempt to renegotiate or cancel the transaction — tweeted that the deal was “temporarily on hold,” despite having already signed an agreement to buy Twitter for $54.20 per share. After Twitter sued Musk for breach of contract, he ultimately purchased the company at the agreed-upon price. In turn, Twitter investors who sold their shares as Musk was publicly equivocating sued him for manipulating the stock.
In a unanimous verdict, the jury found that Musk had intentionally misled the public, including through his claims about the number of bots that made up Twitter’s userbase. The jury also determined that his posts had artificially lowered Twitter’s share price by between $3 and $8 per share. Musk could now be on the hook for $2.5 billion in damages, according to Reuters, although the court has not yet determined an exact dollar amount.
Meanwhile, Musk’s lawyer, Alex Spiro, has asked the presiding judge to review the verdict, accusing the jury of “mocking” his client by writing the number “$4.20” on the verdict form. “The inescapable conclusion from the face of the verdict form is that the jury felt it appropriate to use its verdict to send a message to Mr. Musk, instead of properly discharging its solemn duty to render a just verdict,” Spiro wrote in a Thursday filing.
This Week in Musk:
The White House has turned down an offer from Musk to cover the salaries of Transportation Security Administration employees during the partial government shutdown. Some White House officials reportedly feared that payments from Musk could be challenged in court because of his numerous government contracts. Trump had previously said that he’d “love” for Musk to pay TSA workers, saying, “Let him do that.” Musk has a history of ducking out after promising to pay for things that would benefit the public. (CBS News)
On Tuesday, Baltimore became the largest city to sue Musk’s xAI firm for generating sexually explicit images and videos of children and women. “We’re talking about tech companies enabling the sexual exploitation of children,” Baltimore Mayor Brandon Scott said in a statement. “It’s a threat to privacy, dignity and public safety, and those responsible must be held accountable.” The lawsuit, filed in Baltimore Circuit Court, accused xAI of violating its consumer protection statute. (Reuters)
Also in Maryland, the Baltimore Ravens, an NFL team, said that it would not pursue an infrastructure project with The Boring Company (TBC), a tunneling and transit startup founded by Musk. The Ravens had submitted a bid to TBC, asking the company to build a privately funded tunnel as part of the company’s Tunnel Vision Challenge. But after securing a winning bid, the NFL team suddenly backed out of the partnership, saying, “Following discussions with public partners, we have determined we will not continue with the process at this time.” The decision was announced less than a day after the city of Baltimore sued xAI, suggesting the lawsuit may have played a role. (Baltimore Sun)
In Musk’s latest effort to integrate the three most valuable pieces of his business empire, he claimed last week that he would launch a joint semiconductor fabrication venture between SpaceX, xAI, and Tesla. “I have an important announcement to make, which is the most epic chip-building exercise in history by far,” he said on Saturday while telling a crowd in Austin about his plans to reach one terawatt of annual computing capacity. If built, the Texas facility would be the world’s largest chip producer. It would also require an astronomical amount of capital to build. Analysts at Bernstein estimate the project would cost between $5 and 13 trillion, even as Musk claimed he will do it with just $25 billion. (Bloomberg)
A federal judge has opted to let a lawsuit move forward accusing Musk of wielding executive power in violation of the U.S. Constitution during his time leading the White House’s Department of Government Efficiency initiative. (The Hill)
The top enforcement official at the Securities and Exchange Commission quit on Monday after disagreeing with the preferential treatment shown to Musk. Federal officials are currently in talks with Musk to settle charges brought by the SEC over his irregular acquisition of Twitter in 2022. (Reuters)
Sanders accuses Bezos of using AI to wage “war against the working class”
In a Monday statement, Sen. Bernie Sanders demanded that Jeff Bezos testify before Congress regarding his new plan to accelerate industrial automation by acquiring a large number of manufacturing companies.
“We must demand that Mr. Bezos come before our committee to explain to the American people why he believes it’s a good idea to replace millions of American workers with robots,” said Sanders, the ranking member of the Senate Health, Education, Labor, and Pensions Committee. “We need to understand what will happen to these workers... will they simply be thrown out on the street in order to make Mr. Bezos even richer?”
According to a recent report from The Wall Street Journal, Bezos plans to use a $100 billion “manufacturing transformation vehicle” to implement his automation plan while seeking to acquire companies in the defense, aerospace, and chip fabrication industries. Bezos has already sought funding from oil-rich countries in the Persian Gulf.
This Week in Bezos:
Amazon made a new investment in robotics this week by acquiring Fauna, a startup that claims to build “approachable and human-friendly” humanoid robots. “We are excited about Fauna’s vision to build capable, safe, and fun robots for everyone,” Amazon said in a statement. (CNBC)
Blue Origin, the rocket and space exploration company founded by Bezos, has asked the Federal Communications Commission for permission to launch space-based data centers dispersed across more than 50,000 satellites. (TechCrunch)
Bezos’ wife, Lauren Sanchez, said that her husband helped edit and create a new ocean-themed children’s book that she authored. “Jeff is actually my best editor,” she said. Sanchez is also leveraging the book to promote the Bezos Earth Fund, an environmental nonprofit that Bezos has used to greenwash the AI industry. “When we announced the book in September, the Bezos Earth Fund announced $37.5 million in grants to protect 835,000 square miles of ocean in the Pacific. So, [the book’s protagonist] going under the sea and that work happening at the same time felt like the whole point,” she said. (People)
Oligarch Roundup
OpenAI to terminate AI video-generating app Sora, ending partnership with Disney. By shuttering the controversial app, OpenAI appears to be focusing its personnel and computational resources on more profitable AI products, such as ChatGPT and Codex, its software coding model. AI-generated videos can be extremely costly for companies like OpenAI to produce. Sora also drew legal threats from large entertainment companies and talent agencies, as the app was used to generate videos featuring copyrighted characters. OpenAI had attempted to partially address that issue by signing a licensing agreement with Disney in December. But with Sora now on ice, the partnership — which included a $1 billion investment in OpenAI from Disney — appears to be no more. (ArsTechnica)
CNN contributor Kara Swisher says she won’t work for the Ellisons. “I’m not working for you hacks, I’m just not doing it, and it’s not worth it to me,” the tech reporter said in a Monday interview, referring to billionaire Trump allies David and Larry Ellison, who are poised to take control of CNN. “You don’t wanna work for the Ellisons. I’ve spent a lot of time with Larry Ellison, and he’s a terrible person,” she added. The Ellisons’ increasing control over global news and media has raised the family’s profile and provoked some public hostility. This week, protesters in France placed a banner on the hull of a superyacht owned by Larry Ellison that read, “The Trump Propagandist.” (Mediaite)
After Ellison overhaul, CBS Evening News is poised for historically bad ratings. The network’s flagship weekday news program was recently overhauled by conservative commentator Bari Weiss, who was handpicked by David Ellison to lead CBS News. While Weiss promised that the changes would create a larger audience, it hasn’t worked out that way: Status reports that CBS Evening News “is on track for its lowest-rated first quarter of the 21st century in both total viewers and the advertiser-coveted 25-54 demographic.” Elsewhere at CBS, David Ellison has opted to eliminate the network’s 100-year-old news radio operations amid another round of layoffs. (Status)
Rupert Murdoch lobbied Trump to start Iran war. The 95-year-old media oligarch was one of several outside advisors who privately urged the president to bomb Iran, helping to ignite a war that has dragged on for nearly five weeks, killed thousands, and caused untold economic damage across the world. (Bloomberg)
JD Vance holds fundraiser hosted by far-right billionaire. The fundraiser, which was held Monday night in Austin, Texas, charged attendees a minimum of $50,000. The host of the event was Palantir cofounder Joe Lonsdale, a far-right billionaire who has said the U.S. should bring back public hangings and called for murdering “commies” and blowing up “their gravesites.” As for why Vance held the fundraiser, he appears to be laying the groundwork for a 2028 presidential campaign. (MS Now)
Great column. Hard to swallow at the same time as reading this news.
I’m glad Sanders is being proactive in stopping Bezo taking over manufacturing jobs and replacing them with robots. If those companies can be identified beforehand I suggest those workers come after them pitchforks in hand.