Major Meta Trial Begins as Lawyers Spar over Witnesses, Damages

The Meta company logo at the entrance of its temporary pavilion before the World Economic Forum in Davos, Switzerland, January 18, 2025 (Reuters)
The Meta company logo at the entrance of its temporary pavilion before the World Economic Forum in Davos, Switzerland, January 18, 2025 (Reuters)
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Major Meta Trial Begins as Lawyers Spar over Witnesses, Damages

The Meta company logo at the entrance of its temporary pavilion before the World Economic Forum in Davos, Switzerland, January 18, 2025 (Reuters)
The Meta company logo at the entrance of its temporary pavilion before the World Economic Forum in Davos, Switzerland, January 18, 2025 (Reuters)

Facebook-parent Meta will defend itself in a landmark social media trial that begins Tuesday in California, where attorneys have sparred over witnesses and financial penalties.

A coalition of states sued Meta in 2023, and the four states now going to trial were selected to represent them.

Lawyers for the states will argue Meta deliberately made Facebook and Instagram addictive for children, in violation of state and federal laws, reported AFP.

In recent days Meta, which has more than three billion users around the world, tried to block ex-Meta employee and expert witness, Arturo Bejar, from testifying.

Federal Judge Yvonne Gonzalez Rogers dismissed the company's request, handing the states an early victory. In her ruling, she described it as a "Hail Mary" effort to "eliminate a strong witness" for the plaintiffs.

Bejar has previously testified against the company, including in a New Mexico trial which Meta lost.

Lawyers for California, Colorado, Kentucky and New Jersey are expected to question Bejar about Meta's practices around safety and growth, and whether the company publicly misrepresented what it knew, according to a court document.

In a new filing Monday, Meta asked the judge to restrict the scope of testimony from another potential expert witness, Colin Gray, whom the states intend to ask about "dark patterns" -- features designed to manipulate users into making choices preferred by a company.

Meta founder and chief Mark Zuckerberg is among the star witnesses expected to testify.

Meta "strongly disagrees" with the allegations in the trial, a spokesperson told AFP.

During a hearing last week, a lawyer for the states said they are seeking around $200 billion -- not penalties exceeding $1 trillion, as Meta had claimed in a court filing.

The lawyer said they believe Meta calculated that figure "for shock value."

In addition to financial penalties, the states are demanding changes to Meta's apps.

Eight people were selected last week to serve on an advisory jury, but the judge will make the final decision in the case. The trial is expected to last six weeks and a verdict is expected by early October.

Although it's not the first lawsuit that seeks to hold a social media company accountable for mental health and safety issues, it could become one of the most consequential.

- 'Broader reckoning' -

Last week, Rogers and lawyers for both sides probed prospective jurors about their views of social media and Meta, asking if they or their children had social media accounts and whether social media is responsible for mental health, among other questions.

One prospective juror said they believed social media plays a role in mental health and compared the serotonin boost that some people feel from "doomscrolling" to using cocaine.

The case could be "the beginning of a broader reckoning" for Meta, Nora Freeman Engstrom told AFP via email. She is a law professor and associate dean at Stanford.

It will be important to see the "gap" between what Meta knew privately and what it disclosed publicly, Engstrom said.

"The huge issue here is reputational harm" and being forced to make major changes, Vincent Joralemon, a director at Berkeley's Life Sciences Law and Policy Center, told AFP.

Experts see parallels with a three-decade-old settlement between dozens of US states and tobacco companies.

"It really feels like tobacco in the 1990s," Joralemon said.

While cases about social media harms revolve around the intersection of technology and addiction, the case against Meta focuses on its business practices, similar to when US regulators sued tobacco companies, Joralemon said.

Dozens of US states sued four major tobacco companies for downplaying the harmful health impacts of their products, and won a 1998 landmark settlement that included financial penalties and changes to product marketing.

Those tobacco companies have paid over $176 billion since, according to data from the National Association of Attorneys General.

They will continue to pay $9 billion annually, according to the settlement.



Binance Hackers Used Fake Job Interview in $6.3 Billion Attack

The Binance logo and hacker code are seen in this illustration taken October 30, 2026. (Reuters)
The Binance logo and hacker code are seen in this illustration taken October 30, 2026. (Reuters)
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Binance Hackers Used Fake Job Interview in $6.3 Billion Attack

The Binance logo and hacker code are seen in this illustration taken October 30, 2026. (Reuters)
The Binance logo and hacker code are seen in this illustration taken October 30, 2026. (Reuters)

Hackers used a bogus job interview and software hidden in an advertisement to compromise the computers of two Binance software engineers before using a third's computer to drain $6.3 billion worth of crypto in last week's record heist, the exchange said on Tuesday.

In its initial report on how hackers pulled off what could be the largest-ever financial theft, Binance detailed a multi-stage hacking endeavor that began in June and set off a series of security breaches culminating in the theft on Thursday.

Even as Binance scrambled to lock down its system and freeze withdrawals after detecting the attack late on Thursday, the hackers were still making off with crypto from the exchange nearly four hours after the first theft, Binance said.

The FBI has blamed a North Korean hacking group, a claim North Korea has rejected. ‌Binance has said it ‌is repaying all customers whose funds were stolen.

The attack has raised questions about ‌how ⁠hackers breached the world's ⁠largest crypto exchange after years of North Korea-linked attacks, which have grown in ambition and frequency, and renewed questions about the vulnerability of digital assets to cybercrime.

Cybersecurity experts and government officials have for years warned about North Korean and other hackers using phony job interviews to target employees at companies of interest, said Michael Barnhart, a researcher with cybersecurity firm DTEX. Fake job interviews are a well-known hacking technique.

Binance said it had detected and prevented 57 suspected North Korea-linked cyberthreats in 2026. That shows Binance is “just getting barraged,” Barnhart said.

"This should not have happened, and we apologize for the concern, disruption and uncertainty it caused our users, partners ⁠and the wider industry," Binance said in its report.

LEFT EXPOSED

Binance said the attack ‌began in June when an employee on its wallet developer team downloaded ‌a tool from the internet that hackers had tampered with. The exchange said it detected this afterwards, replaced the device and changed ‌credentials, but the employee's role and those of others on the wallet team were exposed.

A person familiar with the ‌incident said the tool's malicious version had been placed in an advertisement, which meant it appeared higher in a search engine than the real version.

Then in September, a second software engineer seeking a new job downloaded a "malicious code repository" onto the person's computer after interviewing for what they thought was a legitimate role, including meeting virtually with the CEO of a fictitious company, Binance's report said.

On October 20, ‌the attacker used the compromised computer plus an internal AI tool to gain control of the wallet developer's system and that of a second wallet developer.

Nine days later, ⁠the attacker used the second ⁠wallet developer's computer, with stolen credentials from the first wallet developer, and triggered a malicious script to launch the attack.

A limited number of engineers at the company have direct access to wallets — which store or trade crypto — the person familiar with the hack said.

CRYPTO REMOVED IN MINUTES

The attack unfolded quickly on October 29, removing 233.46 million XRP — a cryptocurrency — from five Binance hot, or internet-connected, wallets to an attacker-controlled address in just four minutes, before attackers withdrew other cryptocurrencies including bitcoin, the exchange said in its report.

Binance said it received an internal alert about large transfers and began investigating. It moved to suspend withdrawals, freeze affected tokens and remove unauthorized permissions, resulting in about $2.85 billion of frozen assets, but suspending withdrawals alone could not stop all unauthorized asset movements.

Attackers used 50 signing transactions to manipulate the account, while Binance said it was forced to build new procedures to revoke authorizations, slowing its response.

The final unauthorized transfer was at 2356 GMT, Binance said, nearly four hours after the attack began.

Binance said as a result of the hack, it was increasing investment in AI-enabled detection and working on establishing a security research fund and targeted initiatives with leading AI companies.


Big-Ticket Tech Deals Need to Keep Pace with AI Boom but Risks Remain High, Financial Leaders Say

David Solomon, Chairman and Chief Executive Officer of Goldman Sachs, speaks during the Global Financial Leaders' Investment Summit in Hong Kong, China, November 3, 2026. (Reuters)
David Solomon, Chairman and Chief Executive Officer of Goldman Sachs, speaks during the Global Financial Leaders' Investment Summit in Hong Kong, China, November 3, 2026. (Reuters)
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Big-Ticket Tech Deals Need to Keep Pace with AI Boom but Risks Remain High, Financial Leaders Say

David Solomon, Chairman and Chief Executive Officer of Goldman Sachs, speaks during the Global Financial Leaders' Investment Summit in Hong Kong, China, November 3, 2026. (Reuters)
David Solomon, Chairman and Chief Executive Officer of Goldman Sachs, speaks during the Global Financial Leaders' Investment Summit in Hong Kong, China, November 3, 2026. (Reuters)

Tech companies will need to raise more capital to help meet the enormous demand for the AI industry's growth boom, but there is a risk of an industry correction, global financial leaders said on Tuesday.

Tech stocks globally have faced pressure in recent weeks as growing concerns about AI spending trigger a new wave of selloffs, with combined spending set to exceed $730 billion this year, up from about $700 billion.

Most of the major tech companies were expected to raise more capital to keep up with the enormous likely demand from the AI industry's growth, said Jon Gray, president of Blackstone, which is an active investor in AI infrastructure.

"Now you're in an environment where the demand's running well ahead of supply," Gray said at an investment gathering in Hong Kong, citing "pretty extraordinary" demand for computing power.

"So that gives me a lot of comfort," he added. "Meta and Google and ‌Oracle raising equity ... ‌SpaceX going public, Anthropic going public," Gray said.

"On top of it ... the data centers, the ‌energy ⁠needs are enormous."

STRONG COMPANIES ⁠WITH 'GOOD STORIES'

Despite some AI-related market upheavals, strong companies with "good stories" would still be able to raise capital, though the industry's strong growth could create volatility for investors, said Goldman Sachs Chief Executive David Solomon.

"But things will go wrong too, and we'll get things wrong," he added at the event, the Hong Kong Monetary Authority's Global Financial Leaders' Investment Summit.

"Investors will find situations where they pick wrong, where they lose money ... It's important to have a balanced, diversified view."

JPMorgan Vice Chairman Daniel Pinto said he was bullish on AI, but the market was pricing in revenue and earnings growth for related companies that was too steep.

"I do believe that it has a positive, slow curve and ⁠it may not be as steep as the market is pricing," he said.

"So I think that ‌it could be a correction in the AI sector," he said, adding that ‌other firms with high valuations related to AI could come under pressure as the industry started to recalibrate its expectations.

Last month, S&P said it ‌expected the top six US hyperscalers - Amazon, Microsoft, Alphabet, Oracle, Meta and SpaceX - to spend more than $7 trillion on data centers ‌and other AI-related capex between 2025 and 2030, while having negative free cash flow until at least next year.

Citadel Securities Chief Executive Peng Zhao said the sheer scale of capital and growth in AI was proving difficult for some investors to value correctly, which was adding to volatility in the sector.

"Our ability to really know what this technology will do and its revenue potential is very, very limited due to the fact that we've ‌never seen anything like this," he said.

"It's not so much that people all of a sudden develop a bearish view of what the technology can accomplish, but it's rather the ⁠sudden realization that we can ⁠only know so much ... the numbers involved are so huge."

Morgan Stanley Chief Executive Ted Pick flagged emerging early signs of US markets edging close to a correction, with a majority of stocks in major indices off nearly 10%.

The latest test of investor appetite is a sale of €6 billion ($6.7 billion) in bonds on Monday by Google parent Alphabet .

ASIA-PAC TECH FUNDRAISING MORE THAN TRIPLED

Fundraising by Asia-Pacific tech companies more than tripled to $125.8 billion in the first three quarters of 2026 from $36 billion a year earlier.

The growth was driven by a wave of semiconductor and AI-related deals, such as Chinese chipmaker CXMT’s $9.8-billion IPO and Enflame Technology's $910.6-million listing, LSEG data shows.

Alphabet, Amazon, Microsoft and Meta have signaled that spending on AI will not slow.

In one of the largest debt deals tied to the AI buildout,

Blackstone agreed last week to provide financing of $63 billion with Bank of America, Citi and Morgan Stanley to buy Broadcom's AI chips and networking gear for Anthropic.

The rising cost of capital and some of today's skepticism will slow the pace, however, Gray added.

"But the overall trend is towards greater investment and therefore more needs for multiple forms of capital."

Emmanuel Roman, CEO of asset manager PIMCO, said AI financing deals are attractive, with more coming for the firm.


OpenAI Hires Former US Army Secretary for National Security Role

A person stands next to the logo of ChatGPT, an AI-powered chatbot by OpenAI at Bharat Mandapam, one of the venues for AI Impact Summit, in New Delhi, India, February 17, 2026. (Reuters)
A person stands next to the logo of ChatGPT, an AI-powered chatbot by OpenAI at Bharat Mandapam, one of the venues for AI Impact Summit, in New Delhi, India, February 17, 2026. (Reuters)
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OpenAI Hires Former US Army Secretary for National Security Role

A person stands next to the logo of ChatGPT, an AI-powered chatbot by OpenAI at Bharat Mandapam, one of the venues for AI Impact Summit, in New Delhi, India, February 17, 2026. (Reuters)
A person stands next to the logo of ChatGPT, an AI-powered chatbot by OpenAI at Bharat Mandapam, one of the venues for AI Impact Summit, in New Delhi, India, February 17, 2026. (Reuters)

OpenAI has appointed former US Army secretary Dan Driscoll to a newly created role focused on advancing the use of artificial intelligence in national security, the company said on Monday.

Driscoll will join OpenAI as senior counselor for national security and will "advise on how advanced AI can strengthen national and cyber security," according to a company statement.

Driscoll stepped down from his US Army post in September following reports of tensions with Defense Secretary Pete Hegseth.

"I'm joining OpenAI to help the United States and our allies put this technology to work responsibly, for the people who keep us safe," Driscoll said in OpenAI's announcement.

"The people who serve deserve the very best tools we can put in their hands," he said, adding that AI can help process information and reduce paperwork.