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Low sales threaten Meta’s AI investments amid $25m Trump settlement

In this post:

  • Meta has reportedly entered a $25 million settlement with Donald Trump amid a first quarter forecast that falls short of expectations.
  • Chinese AI firm, DeepSeek AI poses significant challenges for rivals like Meta’s Llama and OpenAI’s ChatGPT. 
  • Zuckerberg says Meta will learn from DeepSeek and implement advances in its systems.

Meta Platforms expects its sales in the first quarter of 2025 to be around $39.5 billion. The figures fall short of the $41.7 billion analyst projections. The Q1 projections could potentially challenge the company’s ambitious investment plans in artificial intelligence initiatives.

The projections came as Meta reached a $25 million settlement with the US President, Donald Trump. The settlement resolved a 2021 lawsuit concerning the suspension of Trump’s Facebook and Instagram accounts following the January 6 Capitol attacks.

The settlement designates $22 million to Trump’s presidential library fund, with the remainder covering legal fees.

Meta Platforms’ fiscal performance in Q4 2024

Following an unusual delay, Meta reported a fourth quarter earning of about $48.4 billion, beating analysts forecasts of $46.9 billion. However, its first quarter earnings projections are lower than expectations, coming in between $39.5 billion and $41.8 billion, which is slightly below analysts’ average expectation of $41.72 billion.

The tempered expectations follow Chinese startup DeepSeek launching its models, which are said to match and even outperform top US rivals, including Meta’s Llama, which caused a massive selloff in the global market. The division responsible for Meta’s virtual reality and augmented reality projects is also evidence of the financial strains of its forward-looking ventures.

Trump and Zuckerberg’s rocky relationship

Meta suspended Trump’s account in 2021, which led to a lawsuit against the company. In March 2024, Meta’s shares fell by about 4% after Trump called it an enemy of the people.

See also  2025 is a make or break year for Meta's metaverse vision - CTO Andrew "Boz" Bosworth

Notably, the settlement could be a step toward fixing the rift between Meta and the Donald Trump administration. It would help as Zuckerberg reportedly positions himself to become Trump’s AI advisor.

The latest disruption in the AI space came after the Chinese AI model, DeepSeek R1 developed a language model and chatbot comparable to OpenAI’s ChatGPT for less than $6 million. Meta’s hefty research and development expenses and capital expenditures for AI data centers could also come under more scrutiny.

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