Meta Platforms' latest annual report contained an unusual, cautionary note for investors. From a report: The tech giant's auditor, Ernst & Young, raised a red flag over the financial engineering Meta used to keep a $27 billion data-center project off its balance sheet. While EY ultimately blessed Meta's accounting treatment, the firm flagged it as a "critical audit matter." This means it was one of the hardest, riskiest judgments the auditor had to make. Such a warning label is rare for a specific, high-profile transaction at a major audit client. Meta moved the data-center project, called Hyperion, off its books in October into a new joint venture with Blue Owl Capital. Meta owns 20% of the venture; funds managed by Blue Owl own the other 80%. A holding company called Beignet Investor, which owns the Blue Owl portion, sold a then-record $27.3 billion of bonds to investors. The joint venture is known in accounting parlance as a variable interest entity, or VIE. Meta said it isn't the "primary beneficiary" of this entity and so didn't have to put the venture's assets and liabilities on its own balance sheet. Meta's assertion that it lacks power over the venture is debatable and has drawn scrutiny from investors and lawmakers. Meta is a hyperscaler and knows how to run data centers for artificial intelligence, while Blue Owl is a financier. Whether the venture succeeds economically will come down to Meta's decisions and know-how. In its report, EY said auditing Meta's decision "was especially challenging due to the significant judgment required in determining the activities that most significantly affect the VIE's economic performance."

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An anonymous reader shares a report: Meta plans to test new subscriptions that give people access to exclusive features on its apps, the company told TechCrunch on Monday. The tech giant said the new subscriptions will unlock more productivity and creativity, along with expanded AI capabilities. In the coming months, Meta said it will offer a premium experience on Instagram, Facebook, and WhatsApp that gives users access to special features and more control over how they share and connect, while keeping the core experiences free. Meta doesn't appear to be locked into one strategy, noting that it will test a variety of subscription features and bundles, and that each app subscription will have a distinct set of exclusive features.

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An anonymous reader quotes a report from TechCrunch: Meta's Oversight Board is tackling a case focused on Meta's ability to permanently disable user accounts. Permanent bans are a drastic action, locking people out of their profiles, memories, friend connections, and, in the case of creators and businesses, their ability to market and communicate with fans and customers. This is the first time in the organization's five-year history as an oversight body that permanent account bans have been a subject of the Oversight Board's focus, the organization notes. The case being reviewed isn't exactly one of an everyday user. Instead, the case involves a high-profile Instagram user who repeatedly violated Meta's Community Standards by posting visual threats of violence against a female journalist, anti-gay slurs against politicians, content depicting a sex act, allegations of misconduct against minorities, and more. The account had not accumulated enough strikes to be automatically disabled, but Meta made the decision to permanently ban the account. The Board's materials didn't name the account in question, but its recommendations could impact others who post content that targets public figures with abuse, harassment, and threats, as well as users who have their accounts permanently banned without receiving transparent explanations. Meta referred this specific case to the Board, which included five posts made in the year before the account was permanently disabled. The Board says it's looking for input about several key issues: how permanent bans can be processed fairly, the effectiveness of its current tools to protect public figures and journalists from repeated abuse and threats of violence, the challenges of identifying off-platform content, whether punitive measures effectively shape online behaviors, and best practices for transparent reporting on account enforcement decisions. [...] Whether the Oversight Board has any real sway to address issues on Meta's platform continues to be debated, of course. [...] After the Oversight Board issues its policy recommendations to Meta, the company has 60 days to respond. The Board is also soliciting public comments on this topic. The report notes that Meta's Oversight Board is able to overturn individual moderation decisions and offer recommendations, but largely sidelined from major policy shifts driven by Mark Zuckerberg.

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Meta has begun laying off more than 1,000 employees from its Reality Labs division as the company redirects resources away from virtual reality and metaverse products toward AI wearables and smartphone features. The cuts amount to roughly 10% of Reality Labs' 15,000-person workforce, according to an internal post from CTO Andrew Bosworth reviewed by Bloomberg. Reality Labs has lost more than $70 billion since the start of 2021, and top executives discussed budget cuts as deep as 30% for the metaverse group in December. Meta plans to continue developing its Horizon metaverse platform, but the focus will shift almost exclusively to mobile phones rather than the fully immersive VR headsets the company originally envisioned.

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Yann LeCun, Meta's outgoing chief AI scientist and one of the pioneers credited with laying the groundwork for modern AI, has acknowledged that the company's Llama 4 language model had its benchmark results manipulated before its April 2025 release. In an interview with the Financial Times, LeCun said the "results were fudged a little bit" and that the team "used different models for different benchmarks to give better results." Llama 4 was widely criticized as a flop at launch, and the company faced accusations of gaming benchmarks to make the model appear more capable than it was. LeCun said CEO Mark Zuckerberg was "really upset and basically lost confidence in everyone who was involved" in the release. Zuckerberg subsequently "sidelined the entire GenAI organisation," according to LeCun. "A lot of people have left, a lot of people who haven't yet left will leave." LeCun himself is departing Meta after more than a decade to start a new AI research venture called Advanced Machine Intelligence Labs. He described the new hires brought in for Meta's superintelligence efforts as "completely LLM-pilled" -- a technology LeCun has repeatedly called "a dead end when it comes to superintelligence."

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Instagram head Adam Mosseri closed out 2025 by acknowledging what many have long suspected: the era of trusting photographs as accurate records of reality is over, and the platform he runs will need to fundamentally adapt to an age of "infinite synthetic content." In a slideshow posted to Instagram, Mosseri wrote that for most of his life he could safely assume photographs or videos were largely accurate captures of moments that happened, adding that this is clearly no longer the case. He predicted a shift from assuming what we see is real by default to starting with skepticism and paying attention to who is sharing something and why.

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