Meta, the tech giant behind Facebook, Instagram, WhatsApp and Messenger, is caught in a legal storm that could shake up its entire empire and stall its AI progress. The U.S. Federal Trade Commission (FTC) has taken Meta to court, accusing the company of using a “buy-or-bury” strategy. Instead of competing, Meta allegedly bought out potential rivals like Instagram and WhatsApp. This case, first filed in 2021, has finally reached trial and if the FTC wins, Meta could be forced to break up its platforms.

AI Ambitions at Risk as Data Access Hangs in the Balance

Meta depends heavily on the user data it gathers across all its platforms to train its Llama AI models. Losing control over that data could mean losing one of its biggest advantages in the AI race. If Meta can’t combine data across Facebook, Instagram, and WhatsApp, its entire AI training pipeline could take a hit.

On April 14, CEO Mark Zuckerberg defended the company in court. He explained that how people use social media has changed, saying,

“People just kept on engaging with more and more stuff that wasn’t what their friends were doing.”

Meta argues that the FTC is ignoring the current reality where TikTok and YouTube are tough competitors.

Still, critics disagree. Jasmine Enberg from eMarketer told the Los Angeles Times that “ Instagram has been picking up the slack for Facebook for a long time” and said losing it could seriously damage Meta’s appeal especially with younger users.

If Meta is forced to separate its apps, it may lose access to the cross-platform data that powers its AI tools. Attorney Andrew Rossow, quoted by Cointelegraph, pointed out that in that case, companies would likely control their own user data, meaning Meta would have to create new, tightly monitored data-sharing deals.

This isn’t the only challenge Meta faces. In 2024, the company had already paused its AI rollout in the EU due to data regulation issues. Plus, according to court filings, Meta has even been caught using pirated books from LibGen to train its models, trying to keep up with OpenAi.

Can META Stock Rise Despite Mounting Legal Pressure?

With so much at stake, Meta isn’t just facing the threat of losing its platforms  it could also be cut off from the vital data that powers its AI advancements. That would put serious brakes on its Llama models and overall AI momentum.

What Do Analysts Say About META?

Even with the legal pressure, analysts are staying positive. META stock still holds a Strong Buy rating, backed by 42 Buys, three Holds, and just one Sell. The average target price is $716.56, pointing to a strong 43% upside potential from current levels. For now, Wall Street believes Meta can weather the storm but the court’s decision could change everything.