On Wednesday, during a California federal trial, the court announced the settlement, which concludes a landmark lawsuit filed by 47 states, the District of Columbia, and US territories.

The post Children social media addiction: Meta to pay up to USD 17.1 billion in landmark settlement appeared first on International Finance.

That defence is falling apart. In 2026, four different governments, in India, the European Union (EU), Australia and the United States, are attacking Meta on completely different fronts.

The target this time is the actual design of its products. Not what people post, but how the apps are engineered to keep people scrolling, how they verify identity, and who profits from the news content that flows through them.

Taken together, these fights amount to the most serious challenge Meta has ever faced, hitting its products, its finances and its business model all at once.

A Privacy Feature Becomes a Fraud Tool in India
In late June 2026, WhatsApp rolled out “usernames,” a feature letting people message each other without sharing their phone numbers. It sounds like a simple privacy upgrade. But within three days, India’s IT ministry froze the rollout before it fully launched.

The reason comes down to a very specific, very costly problem in India, so-called “digital arrest” scams. Fraudsters pose as police officers or bank officials over video calls, falsely claim the victim is under arrest, and pressure them into transferring their life savings.

These scams work because they feel official. Investigators found that during WhatsApp’s early testing, usernames mimicking the Prime Minister, Bollywood stars and government agencies like the CBI could be claimed by anyone, with no ID checks at all.

In India, a phone number is tied to a SIM card and identity documents, which makes it traceable. A username needs none of that. In its notice to WhatsApp, the ministry warned the feature could “materially increase the incidence of online fraud, phishing, digital arrest scams” and impersonation attacks.

WhatsApp pushed back, insisting that “other users need to know the exact username to message you” and pointing to built-in limits on how many strangers an account can contact. The government judged these safeguards too weak against panicked victims mid-scam.

This fits a bigger pattern. India has built a huge digital identity system around Aadhaar (its national ID) and UPI (its payments network), and it wants foreign apps to work within that verified system rather than introduce anonymous alternatives. Digital rights groups have challenged the freeze in court.

The Internet Freedom Foundation branded the move “a licence raj for software features,” arguing the government has no legal right to pre-approve product features before they launch. Regardless of how that case ends, India has made clear that it now treats app design choices affecting hundreds of millions of people as a matter of national security.

Europe Punishes the Apps for Being Addictive
On 10 July 2026, the European Commission issued preliminary findings that Instagram and Facebook likely breach the EU’s Digital Services Act (DSA) because of features that make the apps addictive.

The specific culprits named were infinite scroll, videos that autoplay without being asked, constant push notifications, and recommendation algorithms tuned purely to keep people watching. European regulators argue these features put users, especially teenagers, into an “autopilot” state where they keep consuming content without meaning to.

Under the DSA, very large platforms must assess risks their design poses to users and fix them. Announcing the findings, the Commission’s tech sovereignty chief, Henna Virkkunen, said “protecting the physical and mental health of Europeans must be a priority.” Brussels says Meta simply didn’t do that seriously enough.

Meta points to its “Teen Accounts” safety tools, which cap usage and block nighttime access, and told reporters “we disagree with these preliminary findings.”

But independent researchers testing teen accounts found notifications, autoplay and endless scrolling still showed up constantly, and that screen-time reminders were easy to ignore. Regulators also argue it’s unfair to rely on parents to manage settings they may not understand or have time for.

The financial stakes are enormous. EU fines under the DSA can reach 6% of a company’s global revenue, which for Meta could mean a fine north of USD 12 billion. But experts believe Brussels isn’t necessarily aiming for a drawn-out legal battle.

The DSA deliberately avoids strictly defining “addictive design,” giving the Commission room to use the threat of a huge fine as leverage to push Meta into voluntarily switching off things like autoplay by default. A negotiated settlement, not a courtroom win, may be the real goal.

Australia Wants Meta to Pay for News
Australia’s fight with Meta isn’t about addiction or fraud. It’s about money, specifically, who pays for journalism.

In April 2026, Australia proposed the News Bargaining Incentive (NBI), replacing an earlier law that required platforms to negotiate payments with news publishers. Under the new system, platforms like Meta, Google and TikTok face a 2.25% levy on their Australian revenue unless they strike deals with local news outlets.

Sign enough deals, and the levy drops to 1.5%. Refuse entirely, and the government pockets the full amount and hands it to publishers based on how many journalists they employ.

Meta has hit back hard. In its formal submission on the draft law, the company wrote that “it is a discriminatory tax, applied only to a handful of foreign companies.”

Its arguments run along three lines. Publishers benefit just as much from the traffic social media sends them; audiences increasingly come to Meta’s apps for entertainment, not news, as shown by the fact that engagement didn’t drop when Meta pulled news from its platforms in Canada; and propping up legacy media with tech company money removes any pressure on publishers to modernise. Meta also argues the levy may violate trade agreements between Australia and the United States.

Australia’s urgency is understandable. Since 2008, the country has lost more than 19,500 journalism jobs as advertising money moved online.

But critics note the scheme has a major blind spot, since it exempts AI chatbots like Meta AI and ChatGPT, even though these tools increasingly answer questions using scraped news content without sending any traffic, or money, back to publishers at all.

In America, Juries Are Now the Threat
Unlike India, the EU or Australia, the US has no single federal law governing platform design. Instead, individual states and courts have become the battleground, and 2026 has already produced landmark defeats for Meta.

In March, a New Mexico jury ordered Meta to pay USD 375 million in punitive damages, finding the company misled the public about child safety on its platforms.

New Mexico’s Attorney General, Raul Torrez, called the verdict “a historic victory for every child and family who has paid the price.” Meta said in response that it would “respectfully disagree with the verdict” and confirmed it planned to appeal.

The very next day, a Los Angeles jury found both Meta and Google liable in a case brought by a young woman who started using YouTube at age 6 and Instagram at age 9, awarding her USD 6 million and ruling that features like infinite scroll, autoplay and beauty filters had directly caused her addiction and psychological harm. Meta was found 70% responsible and Google 30%.

These verdicts are just the opening act. A much larger federal case is underway, consolidating claims from more than 2,600 individuals, school districts and local governments, alongside a separate suit from attorneys general in 29 states.

In July, four of those states, California, Colorado, Kentucky and New Jersey, filed a jaw-dropping penalty demand of USD 1.4 trillion, calculated by counting every teenage user and every month they spent over 30 minutes a day on the app as a separate violation.

Meta called the figure “outlandish” and argued in its court filing that a penalty of that scale “has no analog in the history of consumer protection enforcement.”

California’s Attorney General’s office defended the claim, saying its case alleges “Meta has prioritized profits over the safety of kids.” Meta also pointed out that “social media addiction” isn’t a recognised medical diagnosis.

What makes these cases different from past lawsuits is the legal strategy. Rather than suing over content posted by users (which Meta has long been shielded from under a law called Section 230), plaintiffs are suing over the design of the product itself, the algorithms, the notifications, the engagement loops.

That reframing has worked. A federal judge has repeatedly refused to throw the cases out, and internal Meta documents, including one memo stating “if we wanna win big with teens, we must bring them in as tweens,” have strengthened the plaintiffs’ case that the addictive design was intentional.

Trouble Inside the House Too
While fighting on four fronts abroad, Meta is also under pressure internally. In May 2026, it cut around 8,000 jobs as part of a shift toward AI-assisted operations, a move now facing a discrimination lawsuit from former employees who claim an AI system used performance data to unfairly target staff who had taken medical or maternity leave.

Separately, an employee tracking tool built to gather data for AI training was suspended after 1,600 staff signed a petition calling it a privacy violation.

And a new feature called “Muse Image AI,” which let people generate AI images from other users’ photos, was automatically switched on for all public adult Instagram accounts, drawing comparisons to the Cambridge Analytica scandal and raising fresh questions about compliance with European privacy law.

All this is happening while Meta pours between USD 115 billion and USD 135 billion into AI infrastructure in 2026 alone, nearly double what it spent the year before.

What It All Means
What’s happening to Meta in 2026 isn’t a series of unrelated headaches. It’s a shift in how the world regulates big tech.

Governments have stopped playing catch-up on individual pieces of harmful content and started targeting the architecture underneath, including the algorithms, the verification systems and the revenue models.

India wants identity and traceability. Europe wants proof that apps aren’t designed to be addictive. Australia wants a cut of the revenue to save its news industry. America’s courts want someone held financially responsible for the mental health toll on a generation of teenagers.

The result is a Meta that can no longer run one single global product. Usernames may stay frozen in India while working fine elsewhere. Instagram’s feed may need to become calmer and less algorithm-driven in Europe while staying exactly as engaging as ever in less regulated markets.

News might vanish from the platform entirely in Australia to dodge the levy. Piece by piece, the borderless internet Meta was built on is being replaced by a patchwork of national rules, and the company is now spending as much energy fighting sovereign governments as it is building the next generation of AI.

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Even the world’s most valuable consumer electronics company, with supply chain relationships that rivals have spent decades envying, could no longer absorb a memory cost surge that is reshaping the global technology industry from the ground up.

The same day Apple moved, Microsoft confirmed it was raising the price of its Xbox gaming console by USD 100 to USD 150 depending on the model and discontinuing its highest-end 2TB configuration altogether.

In its statement, Microsoft said console storage and memory prices have more than doubled and that it expects prices to double again by fall 2027.

The message from both companies was the same. The consumer electronics industry has entered a new and disorienting era. Welcome to RAMageddon.

Another depressing news have emerged from the smartphone market. Global smartphone shipments fell 11% year-on-year in the Q2 2026, marking their weakest April–June performance since 2013. The reason? Again, the chip shortage, that has raised handset prices and curbed consumer demand worldwide.

The structural shift that nobody saw coming
The rapid expansion of AI infrastructure and workloads is exerting significant pressure on the memory ecosystem. The shortage is driven, in part, by a reallocation of manufacturing capacity away from consumer electronics toward high-margin memory solutions to support AI.

Instead of expanding conventional DRAM and NAND used in smartphones, PCs, and other consumer electronics, major memory makers have shifted production toward memory used in AI data centers, such as high-bandwidth memory and high-capacity DDR5.

This is not a cyclical blip of the kind the semiconductor industry has weathered before. This is not just a cyclical shortage driven by a mismatch in supply and demand, but a potentially permanent, strategic reallocation of the world’s silicon wafer capacity.

For decades, the production of DRAM and NAND Flash for smartphones and PCs was the primary driver for production. Today, that dynamic has inverted.

The three companies that control more than 95% of global DRAM production, Samsung, SK Hynix, and Micron, have pivoted their limited cleanroom space and capital expenditure toward higher-margin enterprise-grade components.

This is a zero-sum game. Every wafer allocated to an HBM stack for an AI server is a wafer denied to the LPDDR5X module of a mid-range smartphone or the SSD of a consumer laptop.

The consequences for supply are stark. Data centers are forecast to consume 70% of all memory chips produced worldwide in 2026, a dramatic shift from historical norms. As recently as 2022, data centers accounted for approximately 20% to 30% of global DRAM consumption.

The reversal has been swift. Goldman Sachs expects US data center capacity additions to climb from 6.4 gigawatts in 2024 to 13.6 gigawatts in 2026 and 36.3 gigawatts in 2027. Every one of those gigawatts is hungry for memory.

Prices that have no historical parallel
Prices of DRAM, used in virtually all modern tech gadgets, rose as much as 98% in the first quarter of 2026 and are set to jump by a further 58% to 63% in the current quarter, according to industry tracker TrendForce. In spot markets, the situation has been even more extreme. In some cases, spot prices have jumped nearly 700% in the past year.

The hyperscale cloud operators driving this demand have locked in their supply through long-term contracts, insulating themselves from the worst volatility at the expense of everyone else. Meta, Google, Microsoft, and Amazon are negotiating long-term DRAM agreements that effectively guarantee supply at premium but stable prices, leaving the consumer electronics supply chain to absorb the volatility.

Micron, for its part, recently disclosed it has locked in USD 22 billion in such long-term commitments. The company simultaneously indicated that it can meet only about two-thirds of medium-term memory requirements for some customers. SK Hynix had already announced by October 2025 that it had sold out its entire 2026 production capacity for HBM, DRAM, and NAND.

The supply partners left servicing the consumer market are adjusting their quoting practices accordingly. Memory quotes are now typically limited to one to 30 days, with pricing often finalised at shipment rather than at order. In some cases, pricing is not locked until the product leaves the factory.

One industry supply partner recently advised customers to plan for potential DRAM price increases of 10% to 20% per month through the end of 2026.

Industry under siege
HP revealed in its Q1 2026 earnings call that memory costs now account for 35% of PC build materials, up from 15% to 18% the previous quarter. For device makers with thinner margins and less purchasing muscle than Apple or Microsoft, the situation ranges from painful to existential.

The base model MacBook Air now retails in the United States for USD 1,299, up from USD 1,099, while the lowest-spec MacBook Pro rose from USD 1,699 to USD 1,999. The base price of the iPad Air increased from USD 599 to USD 749.

GoPro, the struggling maker of action cameras, warned this month that it might go out of business after memory costs shot up between 80% and 115% at the end of the first quarter. Shares of speaker maker Sonos are down 23% this year as memory prices pressure margins.

Nabila Popal, an analyst at IDC, described the current situation as an “absolute existential crisis” for smaller Android phone manufacturers and local device makers producing handsets below USD 100.

Lenovo, Dell, HP, Acer, and ASUS have all warned clients of tougher conditions ahead, confirming price hikes and contract resets as an industry-wide response.

To cope with cost pressures, some handset makers are quietly reducing the amount of memory in certain models and reconsidering the economics of low-margin entry-level devices altogether.

The downstream ripple
The crisis extends well beyond the obvious consumer electronics categories. The automotive industry, where DRAM is widely used in advanced driver assistance and infotainment systems, as well as in the electronic architecture of vehicles, faces a growing risk of business disruptions in 2026.

Gaming console makers Sony and Nintendo have both warned that tighter component supply and higher input costs could influence product pricing and even delay future launches.

The price of NAND storage, the flash memory that stores photos, games, and files on everyday devices, is rising quickly as well.

Samsung and SK Hynix plan to cut NAND production in efforts to increase capacity for the manufacture of more profitable lines like DRAM, meaning non-volatile memory technology prices could face similar price hikes soon.

The market impact is already visible in device shipment projections. IDC estimates that the smartphone market would see its biggest-ever annual decline of nearly 14% this year, while the PC market will fall 11.3%.

Deutsche Bank analysts, in a recent note on the memory crisis, described the production of memory chips as “a zero-sum game” and concluded that memory chips have transitioned from a pure commodity to “a distinctly macroeconomic variable.”

When does it end?
The honest answer, drawing on the current consensus across analysts and manufacturers, is not soon. Micron expects the memory and storage shortage to last at least through 2027.

“Even as we expect industry supply to improve gradually in 2028, we currently do not have line of sight as to when memory supply will be able to catch up with increasing demand,” said Sanjay Mehrotra, Micron’s chair, president and CEO.

New fab construction is underway, including Micron’s multi-site expansion across Idaho, New York, and Virginia totalling well over USD 150 billion in investment. Meaningful incremental DRAM output from these efforts is not expected until 2027 or later, reinforcing the lack of near-term supply relief.

AI architectures that require less memory represent one possible source of relief on the demand side, though this has been less discussed than supply-side solutions.

Google’s March 2026 announcement of TurboQuant, a memory compression technology claiming significant reductions in LLM memory consumption, offered a brief moment of optimism, though manufacturers’ stock prices quickly stabilised after an initial dip.

For the consumer sitting in front of a new laptop price tag that reads USD 200 more than it did a year ago, the underlying cause is the same infrastructure gold rush that is reshaping every corner of the global economy.

The AI buildout that hyperscalers are racing to complete is not merely an industry story. Through the silicon it consumes, it has become everyone’s story.

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The report, titled “Broken, Buried, or Missing,” was produced by the Cybersafety Research Center – a joint initiative of New York University and Northeastern University – with support from the child-safety non-profit Heat Initiative. Researchers found that only 35 of the 86 features tested, or roughly 41%, functioned as claimed and could realistically be found and used by a child.

The remaining 51 features failed in one of three ways:

• They were ‘broken’ and did not deliver the protection promised even though visible to users;
• They were ‘buried’ behind layers of settings that a typical teenager would be unlikely to navigate;
• Or, they were ‘missing’ altogether, meaning researchers could not trigger the feature despite following the conditions the companies themselves described in press releases.

Researchers built test accounts registered to users aged 13 to 17, alongside adult accounts aged 25 and above, to simulate three scenarios:

• a child using a platform normally,
• a teenager attempting to work around a restriction,
• and an adult attempting to bypass protections meant to shield minors from unwanted contact.

All testing was conducted through each app’s standard interface, without technical exploits.

The companies broadly disputed the findings. Meta, TikTok, Snap and YouTube each said their tools function as intended, and some argued the testing did not reflect how children typically use their platforms.

THE HEADLINE FINDING
Every platform tested promises that children cannot search for content related to self-harm or eating disorders, and that any such searches will be blocked and redirected to crisis resources. Researchers found this promise did not hold on any of the four products.

On a TikTok account registered to a minor, the platform’s search function began actively recommending harmful terms after a single search for self-harm content, including phrases referencing self-cutting and disordered eating, according to the report.

On Instagram, autocomplete suggestions offered deliberate misspellings that pro-eating-disorder communities use to evade blocklists as a tester began typing ‘eating disorder’.

Snapchat’s filtering proved similarly brittle: One misspelling returned blocked results, while the correctly spelt term returned none, according to the researchers.

In each case, researchers said the bypass took under three minutes to find.

INSTAGRAM
Instagram had the most features tested of any platform – 29 in total – and also the highest failure rate among the two largest platforms, at 66%. Only 10 of its 29 advertised features were both functional and accessible to a typical teen user.

Five features could not be triggered at all, including a promised prompt warning users before they post bullying or offensive comments.

Researchers said they posted explicit insults and slurs from one teen test account to another, and were never shown Instagram’s advertised ‘pause to rethink’ prompt; Instagram told researchers the tool is not designed to appear between accounts that follow each other.

Among features that did function, researchers flagged Instagram’s adult-to-minor messaging restrictions as illustrative of a broader problem.

Meta’s public materials state that teen accounts can only receive messages from users they follow, or have previously connected with, and that people over 19 are restricted from messaging teens who do not follow them.

Researchers found that once a teenager messaged an adult stranger first, that adult could then respond without restriction – even though the adult had not been ‘followed back’. Meta told the researchers this reflects a young person’s evident intent to connect, and said the feature is working as designed.

Instagram’s default settings performed well by contrast: New minor accounts are automatically set to private, a design researchers highlighted as an example of protection that works because it requires no action from the child.

SNAPCHAT
Snapchat had both the fewest advertised child-safety features of the four platforms, at 11, and the worst overall failure rate, at 73%. Just three features – blocking, blocking all accounts, and location-sharing restrictions – were rated fully successful.

The most serious lapse researchers documented involved adult-to-minor contact. Snapchat promises that adults cannot find or message underage accounts.

In testing, researchers said an adult test profile was able to directly search for, locate and message a child account with no restriction; the child account received and could accept the request, then viewed the adult’s prior message history with no warning displayed.

A separate ‘Find My Friends’ opt-out setting, meant to stop a user from being recommended to others, also failed in practice. Researchers said an account that had opted out was still surfaced as a suggested friend to another user within 24 hours, despite the two accounts having no prior connection.

A Snapchat spokesperson said the company continually works to strengthen its protections, and noted that some of the report’s findings relied on deliberate attempts to bypass safeguards not representative of typical use.

TIKTOK
TikTok posted the best results among the four platforms, with 12 of 24 tested features succeeding – a 50% failure rate, the lowest in the audit. Its strongest showing was ‘TikTok for Younger Users’, an automatic, restructured experience for accounts registered to under-13s that removes search, messaging and algorithmic recommendations entirely in favour of manually curated, view-only content. Researchers pointed to this as a rare example of a platform removing risk by design rather than attempting to filter it after the fact.

Despite that success, TikTok’s search safeguards failed in the same manner as Instagram’s. After a teen account searched for disordered-eating and self-harm content, the platform’s search tool began actively suggesting related harmful terms, including phrases referencing self-cutting, according to the report.

TikTok said its teen accounts include more than 50 safety settings turned on by default, and that its internal review found the features working as intended.

Researchers also documented a separate and unrelated finding involving TikTok’s comment sections beneath videos of minors performing ordinary activities, such as gymnastics, where sexually suggestive comments and images were found to be common – an issue the report categorised as a ‘circulation’ risk rather than a tested safety feature failure.

YOUTUBE
YouTube was the only platform where every one of its 22 advertised features could be triggered and evaluated; none were rated ‘missing’. Even so, only 10 of the 22 succeeded, a 55% failure rate. YouTube’s distinctive weakness, researchers said, was accessibility.

Several working features, including a time-activity dashboard and shorts-viewing limits, were not surfaced or defaulted on for users, leaving a four-feature gap between what worked technically and what a teenager was likely to encounter – the widest such gap recorded in the audit.

YouTube’s search-restriction tool was rated a partial success: it did not surface harmful content directly, but researchers found a child could click through a warning screen to continue viewing search results after typing a sensitive query.

A YouTube spokesperson pointed to internal data suggesting parents who use its supervised-account tools report confidence in the platform’s safeguards, and said the company will continue strengthening protections.

A CONSISTENT GAP ACROSS THE INDUSTRY
Two categories of harm fared worst across all four platforms combined, the report found. Not a single tool addressing ‘conduct’ – features meant to govern how users treat each other, such as bullying detection – both worked and was accessible on any platform tested.

Tools addressing compulsive or excessive use, including screen-time limits, succeeded in fewer than one in three cases; on Instagram, TikTok and YouTube, the same design flaw recurred, with break-time prompts on all three platforms allowing the user to dismiss or ‘snooze’ the limit, and continue using the app.

The report’s authors said they disclosed the vulnerabilities to the companies before publication and stressed their intent is not to rank platforms by safety but to establish that independent, adversarial testing of child-safety claims – similar to established practices in cybersecurity and vehicle crash-testing – should become a standard industry expectation rather than a one-off exercise following public criticism.

Also Read | Australia enforces world’s first under-16 social media ban

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India has emerged as WhatsApp’s largest market, with the platform possessing more than 500 million users while expanding beyond messaging into payments and business services in the South Asian giant. As per Zuckerberg’s announcement, Will Cathcart, the current head of WhatsApp, will move to ⁠a new role within Meta after seven years leading the messaging service.

Announcing Shah’s appointment, Zuckerberg said, “Kunal Shah will join Meta as WhatsApp’s next leader. Kunal built CRED into one of India’s most important technology companies, and he brings the kind of builder mentality and global perspective that will serve him well in running the world’s biggest messaging app. I look forward to working with Kunal to continue to make WhatsApp the best service for billions of people and millions of businesses.”

Meta’s investment into Cred (formed in 2018) is also one of the largest into India’s fintech sector in recent years. While the valuation surpassed the USD 3.5 billion mark, registered by CRED in its last funding round in 2025, it came lower than its 2022 peak of USD 6.4 billion.

The deal gives Meta a minority stake in Bengaluru-based CRED without allowing the Silicon Valley tech giant access to CRED customer ‌data. Talking about CRED, the latter operates a members-only platform for consumers with high credit scores, through which it offers products spanning payments, lending, insurance, wealth management, and lifestyle services.

As per the company, it serves 17 million members on a monthly basis, apart from processing more than 40% of India’s ⁠credit card bill payments and managing over 240 billion rupees (USD 2.5 billion) of lending assets for partner financial institutions.

While CRED will be using the freshly raised capital to accelerate its organizational growth, it will also strengthen its leadership and ⁠institutional capabilities, apart from expanding across product categories. Miten Sampat, who has led strategy and finance at CRED since 2020, has been appointed interim CEO.

Shah, who will be transitioning from fintech founder to the CEO of a popular global messaging platform, is known as an entrepreneur, angel investor, and one of the most influential figures in India’s startup ecosystem. He first came into prominence in 2009 by establishing a cashback promotions company, PaisaBack, which he later described as the key business model inspiring the formation of FreeCharge, which Shah, along with Sandeep Tandon, created in 2010.

In April 2015, Snapdeal announced the acquisition of FreeCharge in a cash-and-stock deal widely reported to be about 2,800 crore rupees (roughly USD 400–450 million). By 2022, as per the Mint, Shah was among India’s most active angel investors by number of deals during the year. Another 2021 Moneycontrol profile reported making more than 200 angel investments, including stakes in fintech companies such as Razorpay and BharatPe.

Shah, who also featured in Fortune India’s 40 Under 40 list in 2016, graduated with a degree in philosophy from Wilson College. He later got enrolled in an MBA program at Narsee Monjee Institute of Management Studies. However, he left the course midway to pursue entrepreneurship. Known best for his first-principles method of problem-solving, Shah’s interviews, speeches, and social media posts have earned him a cult status among Indian founders, investors, and business leaders.

Sha will be relocating to California’s Menlo Park, where he will work from Meta’s headquarters while shaping the future of WhatsApp.

The post Meet Kunal Shah: Meta’s surprising yet powerful pick for WhatsApp CEO’s post appeared first on International Finance.

Known as the ‘AI Mode’, the feature will create a new way to search the popular social media platform by using Meta AI to surface answers pulled from public posts across the portal, including “Groups” and “Reels”. Instead of scrolling through search results, users will be able to ask a question in plain language and get a synthesised answer based on what people are actually discussing.

“AI Mode is a new way to get answers to your questions right on Facebook thanks to Meta AI. From exploring your Feed to searching for something specific, AI Mode uses Meta AI to give you answers grounded in what people are saying publicly across our apps, like in Groups and Reels, so you get real perspectives and experiences rather than a generic list of search results,” Meta said.

“It’s another way Meta AI, powered by Muse Spark, is showing up for you in the experiences you already use. Whether you’re searching or diving deeper into content, Meta AI is right there, ready to help,” the tech giant added further.

The launch of the “AI Mode” follows Meta’s quiet debut of “Forum”, a Reddit-style app that includes its own AI-powered “Ask” tab, allowing users to ask questions and get answers pulled from discussions happening across Facebook Groups.

Facebook has also added editing tools that let users play around with collage cutouts and transition effects for their video montages. Another new feature is the AI-powered photo presets, which will allow an individual to change up his/her look with different clothes, hairstyles, and accessories.

The update on the image front also comes at the right time, as the football fans, amid the ongoing FIFA World Cup 2026, will be able to virtually wear their favourite team jerseys just by tapping the “AI Edit” icon in “Stories” and choosing “Wear It”. They will also have the option of going directly to their profile picture and selecting “Restyle Profile Picture with AI” and “Wardrobe”.

Meta has been attempting to add new life to once-popular, now-dormant Facebook by adding AI features to the social media and networking site. In February 2026, the company introduced animated profile pictures that bring still photos to life — adding a wave or placing a virtual party hat on someone’s head.

In the following month, the tech giant added another AI feature to “Facebook Marketplace” that automatically replies to buyer messages on sellers’ behalf.

Earlier in June, Facebook launched an AI assistant for creators that offers personalised suggestions (including the best times to post and summaries of what audiences are saying in the comments) based on a creator’s content and performance history.

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“Tech companies that have long relied on strong cash flows are ⁠increasingly turning to debt financing as investment needs surge,” Morgan Stanley noted, while estimating that AI-related global debt issuance stood at nearly USD 236 billion as of May ‌31, 2026, fourfold ⁠more than the ⁠same period in 2025.

Hyperscalers Alphabet, Amazon, Microsoft, and Meta are expected to ‌spend USD 700 billion in outlays in 2026 alone. While debt issuance will ramp up in the second half of the year, by 2027, hyperscaler capex will surpass the USD 1 trillion mark.

“Hyperscalers have been broadening their investor base through non-USD issuance. Fundamental (economic) backdrop remains strong, but for now we think (bond) price action is ‌being mostly driven by supply expectations,” the brokerage said.

The sheer volume of new supply has become the dominant force moving bond prices, even as the broader economic backdrop holds up. Among semiconductor firms, Morgan Stanley said, the preferred capital-raising structure is moving toward amortizing arrangements with nearer-term maturities.

“Financing for chip companies, which is seeing an uptick in public and private markets, is shifting to shorter-term deals that are ‌fully repaid over time,” it added further.

Apart from Morgan Stanley, Bank of America too sees tech companies reshaping the US investment-grade bond market, with Amazon, Alphabet, Meta, Microsoft, and Oracle collectively issuing USD 121 billion in dollar-backed corporate bonds in 2025, compared with an average of USD 28 billion per year between 2020 and 2024.

“Hyperscaler capital expenditures in 2026 are on pace to consume close to 100% of operating cash flows, compared with a 10-year average of 40%. Bond markets are filling that gap,” stated UBS.

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“Unfortunately, your role has been eliminated as part of today’s reorganisation. If you are already in the office, we ask that you please gather any personal items at your desk and head home. It’s always sad to say good-bye to people who have contributed to our mission and to building this company. I feel the weight of that,” read another email of his that landed in the inboxes of those who got affected by the layoffs on May 20.

After this, Zuckerberg immediately shot another memo to Meta’s employees, where he stated, “I want to be clear that we do not expect other company-wide layoffs this year. I also want to acknowledge that we haven’t been as clear as we aspire to be in our communication, and that’s one area I want to make sure we improve.”

As per him, the “changes” are part of a far-reaching overhaul that is happening at Meta in 2026, with the Facebook owner surging its AI investments in ⁠a bid to centre AI agents in both its product offerings and its internal operations.

While the layoffs have hit about 20% of the tech giant’s workforce, it has more or less followed the same pattern of “AI-linked job cuts” among major US companies this year, particularly in the tech sector. Meta has also closed an additional 6,000 open roles as ‌part of ⁠the restructuring process.

The “transferred” Meta employees will now be working on initiatives including Applied AI Engineering (AAI) and Agent Transformation Accelerator (ATA) XFN, two teams previously announced by CTO Andrew Bosworth as part of Meta’s “AI for Work” efforts.

These two divisions have been tasked to develop AI agents that can autonomously carry out tasks currently performed by ⁠human staffers. Central Analytics, also a destination for transfer and mentioned in Bosworth’s announcement, will aim to measure productivity and analytics for agent development.

The latest layoffs mark Meta’s biggest company-wide cuts since Zuckerberg launched his 2022-23 “Year of Efficiency”, a period that saw the removal of around 21,000 jobs across the social media giant. Talking about Meta’s capital expenditure on the AI front, the venture has forecast capital expenditure between USD 125 billion and USD 145 billion in 2026, more than double its 2025 spending.

Meta’s severance package includes 16 weeks of base pay, along with two additional weeks for every year worked at Meta. The company would also cover health insurance premiums for employees and their dependents for up to 18 months.

The laid-off employees would continue receiving vested stock grants and paid time off dues. The social media giant also offered three months of external job-search assistance through Lee Hecht Harrison.

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Even the words we use (like cloud computing, artificial intelligence, and wireless networks) suggest that they exist in a world untethered from physical constraints.

In actuality, the global internet is real and physical. It is anchored to the ocean floor by a web of fibre-optic cables, which function much like the human central nervous system.

These subsea systems transport about 95% of all international digital communication and carry around 64,000 terabytes per second of global data. They also make possible $10 trillion worth of daily financial transactions.

Due to the tremendous demand for AI and the geopolitical rivalry between the US and China, the submarine cable industry has become a highly contested geostrategic front. The global subsea market is projected to reach $32.8 billion by 2026, with some estimates suggesting it could grow to $60.5 billion by 2036. This expansion is closely linked to the generative AI boom, which is driving significant growth; consequently, required bandwidth is projected to triple between 2022 and 2027, while overall demand for international bandwidth is expected to double every two years.

Satellite internet is expensive and can cause higher latency. However, submarine cables provide high-throughput, low-latency connectivity, which AI and training workloads demand. Therefore, the industry is predicting $13 billion in new undersea cable investments between 2025 and 2027. The projected capital expenditure has doubled from that of the preceding three years.

The hyperscaler era

There has been a shift within the subsea market as it’s changed from a carrier-led consortium to private ownership dominated by a few technology hyperscalers, such as Google, Meta, Amazon, and Microsoft.

These companies are constructing proprietary networks to control their data pathways directly. They already control the vast majority of bandwidth demand on the core trans-Pacific, trans-Atlantic, and intra-Asia routes, and are responsible for almost half of all new cables built since 2021.

The vertical integration into physical infrastructure helps hyperscalers reduce costs and expand capacity. They can dictate landing points to bypass congested or geopolitically sensitive nodes and implement bespoke optical switching technologies to optimise their global data centre interconnects.

Meta launched Project Waterworth, which is set to be the world’s largest private subsea cable system. At 50,000 kilometres in length, it is designed to connect the United States, India, Brazil, and South Africa.

Waterworth is rapidly expanding digital economies across the global South by utilising up to 24 fibre pairs to maximise data throughput via spatial division multiplexing. Interestingly, the project sidelines Europe-centric corridors, signalling that Meta is betting big on the global South as a core growth region for AI-driven connectivity.

FASTNET, the flagship cable of Amazon Web Services (AWS), is a transatlantic system from Maryland to County Cork, Ireland. Scheduled for 2028, it is designed to deliver over 320 Tbps of capacity. This is a bid to meet the unique demands of modern AI, which must balance the asymmetry between US-based model training and European data residency laws. Achieving this requires high capacity, low latency, and an ability to route around traditional choke points.

FASTNET avoids legacy cable clusters in the US Northeast and the UK. It also incorporates advanced optical switching technology that allows AWS to redirect data to future landing points as AI workloads evolve.

Then there is the whale among them. As the heaviest investor in privately owned submarine cable systems and the largest owner of submarine cable networks, Google owns significant subsea cables such as Dunant, which provides 250 Tbps, Grace Hopper at 352 Tbps, and Equiano. Additional systems like TPU, Nuvem, and Firmina are scheduled to come online in 2026. By creating alternate routes that isolate infrastructure from carrier-dependent nodes, Google has established a gold standard for hyperscaler infrastructure planning.

Infrastructure fragility and the Red Sea chokepoint

Hyperscalers can avoid certain geographic hurdles, but all global data traffic has a few specific maritime choke points. There is nothing more vulnerable and more critical to the internet than the Red Sea.

Around 70% of all global internet traffic and 90% of Europe-Asia data communication is believed to pass through a narrow corridor called the Bab al-Mandab Strait, which is just 26 kilometres (16 miles) wide. This concentration, this choke point, can become a catastrophic point of failure if left undefended.

In March 2024, the region’s fragility was highlighted when four undersea cable systems were severed, disrupting an estimated 25% of all data traffic between Asia, Europe, and the Middle East.

This issue re-emerged when the SMW4 and IMEWE systems near Jeddah in Saudi Arabia failed simultaneously, leading to significant latency spikes and degraded connectivity across the Middle East and South Asia. While Microsoft acknowledged the resulting traffic latency, Pakistan, India, and the UAE were forced to scramble to reroute data through secondary paths.

Repairing these essential assets in conflict-affected waters presents significant challenges. Insurance premiums for repair vessels have skyrocketed due to the presence of Houthi militants and Somalian pirates, leading to situations where cable breaks remain unrepaired for several months. A notable example of this occurred in March 2025, when the PEACE cable broke and remained offline for months on end.

These chronic vulnerabilities are now incentivising the development of new routes to ensure better stability. Key initiatives include Google’s Blue-Raman cable, which is designed to travel overland through Israel, and projects like Africa-1, which aim to bypass the Middle East altogether by utilising a route around South Africa.

China’s Digital Silk Road and the fibre-optic cold war

On one side, there are physical vulnerabilities for these subsea networks, while on the other, a macro-level geopolitical struggle exists for control over the cables. In 2015, China launched the Digital Silk Road (DSR) to export Chinese digital infrastructure to the Indo-Pacific and the Global South, leveraging financing to secure diplomatic alignment. The initial foray was conducted by Huawei Marine Networks, which successfully captured approximately 15% of the global market by 2019.

Following US sanctions, the entity was rebranded as HMN Technologies, and Hengtong Optic-Electric acquired an 81% stake in the company by late 2025. Hengtong has since become one of the top three global optical fibre manufacturers, controlling over 25% of the domestic Chinese market and 15% of the international market. The dominant market position is further strengthened by end-to-end vertical integration and a portfolio of over 5,000 patents.

The Chinese claim that they are trying to ensure stability so that trade happens seamlessly. However, a team of marine engineers from Lishui University (in Zhenjiang province across the coast of Taiwan) applied for a patent for ’a dragging type submarine cable cutting device’ in 2020. According to Newsweek, which inspected the patent, it was described as an ’ocean towing type cutting device’.

The Lishui University authors explicitly wrote: “With the development of science and technology, more and more submarine cables and communication cables are laid on the seabed in all parts of the world, and in some emergency situations, the cables need to be cut.”

Scientists Zhang Shusen, Dai Ying, Fu Changrong, Gao Zikun, Li Xuping and Ji Guangyao co-authored the document.

The patent was either rejected or retracted later, without providing an explanation.

The US responded to Chinese advancements through a comprehensive campaign to excise Chinese state-linked firms from the global subsea ecosystem.

Marsha Blackburn, a Republican Senator, said, “Undersea cables are a critical component of our digital economy and national security. If we let hostile actors control or threaten that infrastructure, we are effectively surrendering a key lever of global influence.”

Washington systematically dismissed Sino-American cable partnerships. The Pacific Light Cable Network (PLCN) was forced to drop its Hong Kong-linked leg and reroute capacity via Taiwan and the Philippines. Regulators in the US had warned that the original configuration could place sensitive data under Chinese jurisdiction. The GAP-1 system, a trans-Pacific cable involving Amazon, Meta, and China Mobile, was effectively shelved in 2023. This left hundreds of millions in construction costs stranded after China Mobile withdrew amid geopolitical pressure.

The confrontation with the most consequences happened with the SeaMeWe-6, a 19,000-kilometre system which links Western Europe and Southeast Asia. HMN Technologies made a bid that was three times cheaper than Western competitors.

However, the US State Department used diplomatic pressure and warned of serious sanctions and a ban on American purchasing capacity on the line if HMN won the contract. The US Trade and Development Agency offered financial incentives to steer countries towards American suppliers.

The pressure succeeded, and the contract was awarded to SubCom for $600 million (about $130 million more than HMN’s bid).

China retaliated and withdrew its 20% funding from SMW6, and announced a parallel Europe-Middle East Asia cable that mirrored the same route but was built exclusively by Huawei. Now there is a structural bifurcation with the US suppressing Huawei’s share of planned global cable contracts to around 10%. This is far behind France’s Alcatel Submarine Networks at 41% and SubCom at 21%.

Huawei has been excluded from many Western consortia, and Chinese firms are systematically building parallel networks with China, Russia, Pakistan, and allied African and Middle Eastern states. Analysts have found that this fragmentation and decoupling between great powers is leading to the fragmentation of the internet into eastern and western blocs, creating a techno-nationalist paradigm where political alliances are more important than network efficiency.
India’s ascension and the Question of resilience

The biggest winner in this geopolitical conflict is India, which is slowly becoming a global hub for data. All the rerouted traffic coming away from the South China Sea and the Red Sea is finding itself in India.

India has 950 million internet users, and its digital economy is expected to reach 20% of GDP by 2027. Anil Kumar Lahoti, Chairman, Telecom Regulatory Authority of India (TRAI), said, “India’s data transmission capacity is set to quadruple with new undersea systems, turning the country into a critical junction between Europe, the Middle East, and Asia.”

Without this cable overhaul, India cannot anchor the AI driven workloads of the next decade.

Reliance Jio’s India-Asia-Express (IAX) and India-Europe-Express (IEX) systems are contributing over 200 Tbps to this growth. Mumbai hosts at least 14 cable landing stations.

Despite all the money that’s been poured into these projects, they are still dangerously vulnerable. Over 80% of all cable faults occur in shallow waters because of commercial fishing trawlers and anchoring, or mundane accidents with devastating consequences.

In an era of heightened tensions, accidents and deliberate attacks are in a grey zone. Anchor dragging by state-aligned vessels has disrupted cables in the Baltic Sea and near Taiwan, though it is hard to prove that it was done deliberately.

There is also a shortage of dedicated repair vessels around the world, which makes the threat even worse. Most repair vessels are Chinese-owned, and there are fewer trusted Western ships, which makes Americans and Europeans wary.

Security analysts worry that passive data extraction devices could theoretically be inserted into cables. Even if such an event were to happen, no one would know.

The great bifurcation

The global submarine cable market is now a logistical necessity for the telecommunications industry. Hyperscalers are internalising the internet’s physical layer to feed the insatiable data requirements of artificial intelligence, fundamentally altering the economics of global bandwidth.

In 21st-century geopolitics, physical choke points (like the Red Sea) have demonstrated how asymmetric threats are and how ill-equipped repair fleets can be, to the detriment of intercontinental connectivity. Washington has been campaigning to block Chinese firms from Western networks, and has been trying its best to stop the Digital Silk Road.

But this has structural costs. As the bifurcation of the subsea architecture into politically aligned spheres continues. The physical cables that once supported the globe are now being instrumentalised to divide it.

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Meta’s action follows Mark Zuckerberg’s declaration in January 2026, where he identified his company’s next growth area, glasses, which billions of people wear for vision correction.

According to the tech giant, the new products, “Ray-Ban Meta Blayzer Optics” and “Ray-Ban Meta Scriber Optics,” would become available at optical retailers ⁠in the United States and select international markets on April 14.

“The new models will feature overextension hinges, interchangeable nose pads and optician-adjustable temple tips to make them adaptable to each user’s unique face shape. The Facebook parent plans to invest hundreds of billions of dollars in its pursuit of ‘personal superintelligence,’ in which advanced gadgets, among other products, would bring the benefits of AI to individual users. Meta develops its AI glasses in partnership ‌with ⁠Ray-Ban owner EssilorLuxottica,” reported Reuters.

Discussing global smart glasses, shipments in the domain reached 9.6 million units in 2025, with Meta alone accounting for about 76.1% of the total. As per International Data Corporation’s research director Ramon Llamas, in 2026, the figure is expected to reach 13.4 million units.

The social media conglomerate launched Meta ⁠Ray-Ban Display glasses at USD 799 last year, with a built-in display that enables users to read messages, follow navigation directions and interact with AI services without using a phone.

Recently, Meta delayed ⁠the model’s global rollout, citing a mismatch between strong demand and short supply. The Display smart glasses can also be ordered with prescription lenses for an additional USD 200.

And Meta is not alone in bringing out the next-generation smart gadgets. Snap, too, has established ⁠an independent subsidiary for its augmented reality (AR) smart glasses and is reportedly gearing up for the product launch. Google, on the other hand, has partnered with Warby Parker to launch AI glasses.

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