Meta Platforms is engineering its artificial intelligence future on two very different fronts. The company is set to unveil its own in-house AI chips this September, a strategic bid to loosen Nvidia’s grip on its data-center hardware, while simultaneously defending itself against a lawsuit that accuses its AI systems of weeding out employees on parental leave, sick leave, or with disabilities. The contrast could hardly be sharper: Metas infrastructure bill is running into the tens of billions, and the same technology that powers its silicon strategy is now at the centre of a bitter employment dispute.
Twenty-six current and former Meta staff, who have chosen to remain anonymous, filed the lawsuit on Monday in a federal court in Oakland, California. They claim the company used internal AI-driven ranking tools to assess workers on metrics like productivity and how actively they engaged with Meta’s own AI platforms. Because employees absent due to illness, pregnancy, or family care inevitably score lower on those measures, the plaintiffs argue the system effectively wrote them into redundancy lists. The suit also alleges Meta never tested its algorithms for bias — a potential violation of recent laws in California and New York City. Meta has rejected the accusations outright. A spokesman said on Tuesday that all personnel decisions are made “by people, not AI,” and described the claims as baseless. The legal challenge follows a major reduction in force in May, when Meta cut 10% of its global workforce, almost 8,000 jobs. Further cuts were flagged earlier this year, but CEO Mark Zuckerberg has since said he does not expect additional company-wide layoff waves in 2026.
The courtroom drama is unfolding as Meta barrels ahead with its custom chip programme. The first in-house processors are due to be presented in September, with production reportedly handled by Broadcom and Taiwan Semiconductor Manufacturing. Meta plans to refresh the chip design every six months, aiming to shrink its reliance on external suppliers and cut operating costs. The silicon push is integral to a far larger ambition: Meta wants to boost its total compute capacity to 14 gigawatts by 2027, double the 7 GW target set for 2026. Just this week the company announced it will expand its Hyperion data center in Louisiana to reach 5 GW, lifting the total investment in that single site to more than $50 billion. The chip strategy is meant to give Meta end-to-end control over the infrastructure layer that underpins its Facebook, Instagram, Messenger and WhatsApp ecosystems, as well as the Reality Labs augmented- and virtual-reality division.
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So far, the stock market is treating the two narratives as independent. Meta shares closed Tuesday at €579.20, a level that leaves them up 9.74% over the past week and 13.17% over the past month. The relative strength index sits at 65.2, suggesting moderate upward momentum without flashing an overbought warning. Shares have gained 4.32% year to date and have recovered 28.11% from the 52-week low of €452.10 hit in March. Still, the stock remains 14.55% below its peak of €677.80 reached on 31 July 2025, and on a 12-month view it is still down 5.41%. The annualised 30-day volatility of 49.41% indicates investors are braced for more sharp swings in the near term.
What remains to be seen is whether the bias lawsuit will eventually weigh on Metas valuation. The company’s market capitalisation currently stands at roughly €1.48 trillion, a level that suggests the market is far more focused on the chip rollout and data-centre buildout than on the legal risk. But the litigation is in its earliest stages. The court in Oakland will first have to rule on whether the failure to conduct bias testing on AI tools — an obligation under some state statutes — gives the plaintiffs a viable claim. A ruling on that question could set a precedent for how tech companies deploy algorithmic systems in human-resources decisions, and that prospect adds a layer of uncertainty that the share price has yet to price in.
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