Meta to pay $25m to settle Trump lawsuit over ban

Former US President Donald Trump has signed a legal settlement agreement under which social media giant Meta (the parent company of Facebook and Instagram) will pay approximately $25 million (about £20 million). Trump sued the social media company and its CEO, Mark Zuckerberg, in 2021 after his accounts were suspended following the January 6th Capitol Hill riot.

In July 2024, Meta lifted the final restrictions on Trump's Facebook and Instagram accounts, close to the US presidential election. According to the Wall Street Journal, about $22 million of this settlement will go to the Trump Presidential Library fund, with the remainder used to cover legal fees and other plaintiffs involved in the lawsuit. Meta has not admitted any wrongdoing.

Meta suspended Trump's accounts in 2021, stating that he would be banned from using the platform for at least two years. After Trump won the election in November, Zuckerberg visited Trump's Mar-a-Lago resort in Florida, which was seen as a sign of a thaw in their once strained relationship. Subsequently, Meta donated $1 million to Trump's inauguration fund, and Zuckerberg was invited to attend Trump's inauguration, where he sat alongside other global tech billionaires.

For years, Trump has been critical of Zuckerberg and Facebook, calling the platform "anti-Trump" in 2017. Their relationship further deteriorated after the president's account was banned. Trump called Facebook "the enemy of the people" in March 2024. Additionally, Twitter (now renamed X, owned by Trump ally Elon Musk) had also "permanently" suspended Trump's account. After Musk acquired the company for $44 billion, he conducted a poll on the site, which narrowly supported the reinstatement of Trump's account, and subsequently restored Trump's account in 2022.

Separately, Meta on Wednesday defended its $65 billion investment in artificial intelligence (AI). This comes after the sudden rise of Chinese AI application DeepSeek caused significant volatility in tech stocks. Zuckerberg told investors that there is much to learn from DeepSeek, but it is too early to have "really strong opinions" about what the application means for the future of AI. He added, "If anything, I think the recent news only reinforces our conviction to focus on this." Despite the rapid rise of DeepSeek causing many US tech stocks to fall this week, Meta's share price has bucked the trend. The company's shares rose in after-hours trading after it released better-than-expected financial results on Wednesday.

However, questions remain about what impact the progress of Chinese AI will have on the US AI market, given that DeepSeek claims its development costs are much lower than its US competitors. Zuckerberg said on Wednesday's earnings call that the rise of DeepSeek has reinforced his belief in the company embracing "open source" AI. Meta, the parent company of Facebook, Instagram, and WhatsApp, has taken a different approach than many US companies, releasing an open-source AI model for free. Zuckerberg said on Wednesday that he believes this approach is crucial to maintaining US leadership in this emerging industry as countries around the world race to become key players. "There will be an open-source standard globally, and I think it's crucial for our own national advantage that that standard be an American standard," he said. "We take this very seriously. We want to build an AI system that people around the world are using."

Meta announced last week plans to spend up to $65 billion this year to expand its AI infrastructure. Zuckerberg acknowledged on Wednesday that discussions are still ongoing about how best to direct AI investments, but he told investors that making large-scale investments makes sense for a company that serves billions of people globally. "I would bet that the ability to build this infrastructure is going to be a major advantage—both in terms of quality of service and scale of service," he said. He also said this year is a crucial one for the company in other areas, and this year will be key in determining whether the company's smart glasses sales take off as expected. Zuckerberg has previously said he expects all glasses to be replaced by smart glasses within a decade, a prediction he reiterated on Wednesday. He also spoke about plans to revive the "cultural relevance" of Facebook, the social media site that made his fortune, but which has fallen out of favor compared to other offerings such as Instagram and TikTok. Zuckerberg also defended his recent decision to end fact-checking, saying he believes the community notes program will be more effective. He said the company has not seen a drop in advertiser demand as a result of these changes. The company reported revenue of over $48 billion for the last three months of 2024, a 21% increase compared to the same period last year. Despite the strain on the company due to AI spending, it still reported quarterly profits of over $20 billion, a 49% increase from a year ago.