UK watchdog opens an investigation into Meta’s AI terms for publishers

S&P downgraded Meta's credit rating outlook to 'negative', citing uncertain returns from AI investments and high capital expenditure. Meta's free cash flow turned negative in Q3, with $2.1B spent on investments exceeding operating income. The company plans $145B in capital expenditures this year, with a projected $710B funding shortfall next year. Meta disputes S&P's assessment, but market concerns grow as Alphabet and Amazon also face negative cash flows from AI investments.

AMD will invest $1 billion in Meta's $37.5 billion equity offering, buying 1.6 million shares at $625. Meta holds a warrant for up to 160 million AMD shares, vesting as it purchases AMD chips. AMD's investment aligns with its supply agreement and potential future revenue from Meta's AI projects. Meta's capital expenditure exceeded cash flow in Q3, necessitating the equity raise.

S&P revised Meta's outlook to negative, citing $225B+ AI spending forecast for 2027, leading to cash flow deficits. Concerns include lease obligations pushing leverage above 1.0x. Alphabet's AI satellite project and France's proposed gigabyte tax on content providers were also noted.

Meta settled a lawsuit with an 18-year-old who alleged Instagram and Facebook were designed to encourage addictive behavior. The settlement ends claims against Meta in an ongoing trial, leaving Snap as the sole defendant. Meta maintains it has been developing safety features for over a decade. The case could influence future disputes over social media addiction.

Broadcom is backing a $63B SPV to finance chip purchases for Anthropic, with Bank of America, Citi, Morgan Stanley, and Blackstone involved. Meta raised $37.5B, and Mubbadrah plans a ~$3B AI campus in Oman. Amazon's AWS is sold out for 2027, and Charlotte extended its data center moratorium.

Meta settled lawsuits with two teens who accused Instagram and Facebook of encouraging addiction and harming mental health. The settlements, announced October 30, 2026, resolve claims of psychological harm. Snap remains the sole defendant in the trial. Financial terms were not disclosed. Meta had previously settled with another teen and faces an appeal over a $4.2 million verdict. The cases allege harmful design features, not user-generated content.