Meta plans to cut AI investments: Warning of EU penalties!

Meta plans to cut AI investments: Warning of EU penalties!

Meta Platforms Inc. is currently faced with a number of challenges regarding the strategic direction of the company. Meta leaders are considering making smaller investments in their Llama AI model in the future. This consideration fits into a larger context recently influenced by financial markets and regulatory developments. Loud Market screener Meta's share price, which was at $729.36 on June 27, 2025, has recovered by 0.45% and is up an impressive 24.66% year-to-date.

In addition, the S&P 500 and the Nasdaq reached record highs, while at the same time the Federal Reserve's preferred inflation indicator rose above expectations. In this uncertain environment, Meta also faces strict regulatory measures from the EU. The company recently criticized the EU antitrust authorities' decisions and warned of unfair treatment, which Meta said discriminates against its business model.

Regulatory challenges

A significant point is the €200 million fine imposed on Meta because users on Facebook and Instagram had to choose between personalized ads and paying to avoid them. This decision is just the first such severe response under the EU's new Digital Markets Act (DMA), which aims to promote competition in digital markets and give consumers more choice. Meta plans to appeal this decision as the company expresses concerns that the EU is discriminating against successful American companies.

In addition to the penalties, Meta faces possible additional sanctions. Meta could risk a daily fine if it fails to comply with European Union requirements because of its pay-or-consent model. Data protection advocates are also calling for the DeepSeek platform to be banned from the Google and Apple app stores in Germany.

Future prospects and growth

Despite the regulatory challenges, Meta plans to continue developing its content and technology. Among other things, the company is planning a special Instagram version for televisions and is negotiating the takeover of PlayAI. Meta's net sales are predominantly distributed through social networking at 98.6% and only 1.4% from VR/AR products. According to its own information, Meta reaches 3.98 billion monthly active users worldwide and generates 97.5% of its net sales through advertising space.

Looking at the geographical distribution of net sales, Meta generates 39.2% in the US and Canada, followed by 26.8% from Asia Pacific and 23.1% from Europe, while the remaining 10.9% comes from other regions. While the company has to assert itself in a challenging environment, developments show that Meta remains committed to its innovation and market position.