‘Just the beginning’: New Mexico AG warns AI industry after $25B Meta ruling

Rhode Island Attorney General Peter Neronha sued Meta, alleging the company profits from fraudulent ads on its platforms, violating the state's Deceptive Trade Practices Act. The lawsuit seeks penalties and injunctive relief, claiming Meta knowingly targets vulnerable consumers, including senior citizens, with scam ads. According to Reuters, about 10% of Meta's annual ad revenue ($16 billion) comes from such ads. The state seeks restitution, civil penalties, and a monitor to ensure compliance.

South Korea's KOSPI and KOSDAQ indices fell over 4% as U.S. semiconductor stocks plunged 6.7%, driven by foreign selling. SK Hynix halted Solidigm's IPO, citing market conditions. Samsung Electronics and SK Hynix shares dropped 4% and 3%, respectively. Meta's AI spending plans also weighed on sentiment, with oil prices rising on geopolitical tensions.

Meta shares dropped 7% after reporting negative free cash flow of $2.12B in Q3 and raising its annual capex forecast to $135B-$145B. Revenue grew 26% to $64.6B, beating estimates. The company plans to issue nonvoting Class C shares to finance growth and retain CEO Mark Zuckerberg.

Meta CEO Mark Zuckerberg threatened to leave California if Proposition 40 passes, potentially selling a large portion of his Class B common stock. Meta's Special Committee approved a plan to issue new non-voting Class C stock, providing Zuckerberg with liquidity to offset the tax liability and ensuring his continued residence in California for eight years.

The Nasdaq Composite fell 2.60% to 26,008.86 on Thursday, driven by declines in Meta Platforms (down 7%) and Lam Research (down 12%). Meta's higher expense outlook and Lam Research's weak guidance sparked concerns about AI spending. Other semiconductor stocks also dropped significantly. The index is now 5.8% below its October record high.

The UAE-led Operation Confrontation Ghost, involving 30 countries and 13 private partners, identified $39 billion in fraud-linked assets. The operation targeted AI-enabled fraud and digital platform scams, blocking 123.71 million fraud attempts and arresting 960 defendants. Recovery efforts are underway, but no total recovered amount was provided.