Meta Reaches $25 Million Settlement with Trump Amid Policy Shifts and AI Expansion

Meta has agreed to pay $25 million to settle a lawsuit filed by former U.S. President Donald Trump in 2021 over the suspension of his Facebook and Instagram accounts following the January 6 Capitol riot. The agreement marks a significant concession by the tech giant and a legal victory for Trump, who had previously accused social media platforms of censoring him.

Trump initially sued Meta and other major tech companies in 2021, arguing that they had wrongfully restricted his online presence. According to sources, approximately $22 million of the settlement will be allocated to funding Trump’s presidential library, while the remaining $3 million will cover his legal expenses and compensate other plaintiffs involved in the case. However, Meta has not admitted to any wrongdoing as part of the agreement, which was first reported by The Wall Street Journal.

The settlement follows a similar resolution in December when ABC News agreed to pay $15 million to settle a defamation lawsuit brought by Trump. As part of that agreement, ABC donated the funds to Trump’s future presidential foundation and museum, while the network and anchor George Stephanopoulos issued a statement expressing regret over remarks made about Trump during a televised interview.

Meta’s Shifting Policies Under Trump-Aligned Leadership

Alongside the legal settlement, Meta has been undergoing significant internal policy shifts. CEO Mark Zuckerberg has been restructuring the company to align with the changing political landscape, reportedly expressing support for Trump and implementing sweeping changes across Meta’s platforms. Recent adjustments include expanding free speech policies on Facebook, Instagram, Threads, and WhatsApp while dismantling diversity and inclusion initiatives—a move that has sparked internal controversy among employees.

During an investor call on Wednesday, Zuckerberg publicly praised the Trump administration, crediting it with supporting American tech firms and defending industry values. He described 2024 as a pivotal year for redefining the company’s relationship with government institutions.

Financial Performance and AI Investments

Meta reported strong financial results for the fourth quarter, posting a 21% increase in revenue and a 49% rise in profit. The company attributed its growth to improvements in advertisement targeting and content recommendation systems, driven by continued investments in artificial intelligence.

Revenue for the quarter reached $48.4 billion, surpassing Wall Street estimates of $47 billion and marking an increase from $40.1 billion a year earlier. Profit soared to $20.8 billion, compared to $14 billion in the same period last year.

However, the company’s outlook for the current quarter raised concerns among investors. Meta projected revenue between $39.5 billion and $41.8 billion, with the lower end of the range falling short of analysts’ expectations. Additionally, the company announced plans to significantly increase spending, with capital expenditures projected to rise to between $60 billion and $65 billion—up from $38 billion to $40 billion in 2024—as it ramps up investments in data centers and AI infrastructure.

Meta’s push into artificial intelligence places it in direct competition with industry leaders like Google, Amazon, Microsoft, and OpenAI. Meanwhile, the emergence of Chinese AI start-up DeepSeek has raised questions about the competitive landscape. DeepSeek recently developed a new AI model at a fraction of the cost incurred by U.S. firms, leveraging open-source technology shared by companies like Meta.

During the investor call, Zuckerberg acknowledged DeepSeek as a new competitor but emphasized the importance of maintaining an American-led AI standard. While he supported an open-source approach globally, he underscored the need to preserve a strategic advantage for U.S. companies.

Challenges in the Metaverse and Continued Growth

Despite its financial successes, Meta’s metaverse ambitions continue to struggle. The company’s Reality Labs division, responsible for developing virtual and augmented reality products, reported a $5 billion loss in the fourth quarter.

Nevertheless, Meta’s core platforms continued to expand their user base. The company reported that the number of “daily active people” across its apps reached 3.35 billion in December, reflecting a 5% increase from the previous year.

As Meta navigates legal settlements, internal restructuring, and intensifying AI competition, its evolving strategy will shape its trajectory in both the political and technological spheres.

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