😞 Meta's AI challenge

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Meta Platforms Faces AI Development Challenges and Antitrust Scrutiny

Meta Platforms, the parent company of Facebook, Instagram, and WhatsApp, has recently faced significant challenges impacting its stock performance and strategic initiatives.

A delay in the rollout of its flagship artificial intelligence (AI) model, Behemoth, coupled with an ongoing antitrust lawsuit from the Federal Trade Commission (FTC), has drawn attention from investors and industry observers.

Since Meta is a big tech name, these happenings have investors interested.

Behemoth AI Model Delay

Meta’s Behemoth, part of the Llama 4 family of large-language models, was initially slated for an April 2025 release during Meta’s first Llama developers conference, LlamaCon. The launch was postponed to June, and according to a Wall Street Journal report, it has now been delayed further to fall 2025 or later. 

This delay stems from engineering challenges in enhancing Behemoth’s capabilities, with internal concerns about whether the model offers sufficient advancements over its predecessors, Llama 4 Scout and Llama 4 Maverick, released in April 2025.

To make matters worse, the original team behind the first Llama model has largely disbanded—11 of the 14 researchers who authored the initial paper have since left the company. While the models released in April performed well, The Information reported that it may have been a bait and switch. CEO Mark Zuckerberg stated that the company had designed its models to do well on benchmark tests, while it released separate versions to the public.

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Internal Struggles and Strategic Implications

Meta’s engineers are grappling with training difficulties, prompting debates within the company about Behemoth’s readiness for public release.

Reports indicate that Meta may consider releasing a more limited version of the model to meet timelines or even restructuring its AI product group management to address these setbacks. The company has publicly positioned Behemoth as a superior model, claiming it outperforms competitors like OpenAI, Google, and Anthropic in certain benchmarks. However, internal sources suggest its real-world performance may not yet match these claims, raising questions about the efficacy of Meta’s massive AI investments.

Financial Impact and Market Reaction

The delay announcement led to a 2.4% drop in Meta’s stock price on Thursday, May 15, 2025, with shares stabilizing in premarket trading the following day. Despite this, Meta’s stock has risen 10% in 2025, outperforming some “Magnificent Seven” tech giants.

The stabilization suggests that the market may view the delay as a manageable setback, given Meta’s strong position in social media and advertising.

Meta’s AI Investment Strategy

Capital Expenditures and Industry Context

Meta is heavily investing in AI, with its 2025 capital expenditures forecast recently increased to $64 billion to $72 billion, up from $60 billion to $65 billion.

This significant spending, much of which is allocated to AI development, underscores CEO Mark Zuckerberg’s long-term vision for AI-driven innovation across Meta’s platforms, including Facebook, Instagram, and WhatsApp.

The tech industry is in a race to scale AI capabilities, but Meta’s delay suggests that the strategy of “just making everything bigger” may be hitting limitations, as noted by Axios. Competitors like OpenAI have also faced delays with models like GPT-5, indicating broader industry challenges.

Strategic Importance of AI

Meta’s AI investments are critical for maintaining its competitive edge, particularly in enhancing user engagement and monetization across its platforms.

With over two billion monthly active users on Instagram and significant growth on WhatsApp, Meta leverages its vast user base to deploy AI-driven features like chatbots and personalized content.

The delay in Behemoth’s release could hinder Meta’s ability to keep pace with rivals, but the company’s robust ecosystem may mitigate short-term impacts.

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Antitrust Challenges

FTC’s Case Against Meta

Simultaneously, Meta is navigating a high-stakes antitrust trial initiated by the FTC in 2020, which resumed in April 2025.

The FTC alleges that Meta’s acquisitions of Instagram in 2012 for $1 billion and WhatsApp in 2014 for $19 billion were part of a “buy-or-bury” strategy to eliminate competition and maintain a monopoly in personal social networking services.

The trial has featured testimony from key figures like Zuckerberg and former COO Sheryl Sandberg, with the FTC presenting internal documents to argue that Meta sought to neutralize competitive threats.

Meta counters that these acquisitions enhanced consumer value, pointing to Instagram’s growth from 50 million to two billion monthly active users by February 2025 and WhatsApp’s expansion as evidence of improved services.

The FTC faces challenges proving that these decade-old acquisitions, approved by regulators at the time, constitute illegal monopolistic behavior.

Experts suggest that while the FTC has compelling evidence, the passage of time and the difficulty of defining the social networking market may weaken its case. A potential outcome could involve Meta being forced to divest Instagram and WhatsApp, though some analysts predict a settlement to avoid such a drastic measure.

Conclusion

Meta Platforms is at a critical juncture, balancing ambitious AI development with legal challenges that could reshape its business. But, it is not the time to give up on this stock.

Loop Capital issued a bullish price target for Meta on Friday, projecting a 40% upside with a target price of $888. Analyst Rob Sanderson pointed to Meta's strong AI-driven performance gains and ongoing infrastructure investments as major catalysts for future growth. He advised long-term investors to shift their focus away from Google and keep a closer eye on Meta instead.

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