EU Launches Antitrust Probe Into Meta’s AI Strategy

Meta Platforms Inc. has recently captured headlines with a series of ambitious strategic moves, from committing billions to artificial intelligence development to recruiting a top Apple executive and maintaining a solid dividend. However, the company now faces significant regulatory headwinds in a key market. The European Commission has formally initiated an antitrust investigation against the tech giant, raising the specter of another costly penalty in Europe.

At the heart of the European Union's new probe is Meta's policy for AI developers on its WhatsApp messaging platform. Regulators are examining whether the company is deliberately restricting access for external AI assistants to unfairly favor its own "Meta AI" service. The Commission's preliminary view suggests this could constitute an abuse of Meta's substantial market power, violating EU competition rules.

This investigation reopens recent regulatory wounds for the social media conglomerate. Meta was recently fined 200 million euros in a separate EU case. Should Brussels conclude this time that competition rules have been breached, the company risks substantial financial penalties and potential operational restrictions within one of its most important global markets.

Unprecedented $70 Billion AI Investment Plan Continues

Despite mounting regulatory pressure, Meta shows no sign of slowing its aggressive growth strategy. The company plans to invest between $70 billion and $72 billion in AI infrastructure during 2025 alone—a capital expenditure program of unprecedented scale. This massive outlay underscores its commitment to becoming a leader in the artificial intelligence sector.

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Concurrently, Meta is strengthening its leadership team. Alan Dye, Apple's long-serving design chief, is joining Meta's Reality Labs division. His mandate is to elevate the design quality of Meta's hardware products, such as its smart glasses, to a level rivaling Apple's renowned standards.

Some market analysts remain bullish on the strategy. Researchers at Evercore ISI maintain an optimistic outlook, citing a price target of $875 per share. They point to the significant monetization potential of WhatsApp, which they estimate could generate revenue of up to $40 billion by 2030.

Shareholder Sentiment Cools Amid Uncertainty

The market's current reaction to these developments has been cautious. Meta's stock price trades notably below its annual peak, having recently declined by approximately 1.2%. Investor hesitation appears rooted in a dual risk assessment: the uncertain return on massive AI investments on one side, and escalating regulatory challenges in Europe on the other.

A stabilizing factor for investors is Meta's ongoing commitment to shareholder returns. The company will distribute a quarterly cash dividend of $0.525 per share on December 23, signaling that its cash flow generation remains robust despite heavy capital spending. Nevertheless, whether this dividend assurance can fully offset broader market concerns may largely depend on the ultimate findings from EU regulators in Brussels.