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Meta Faces Unprecedented Legal Reckoning Over Youth Mental Health As Massive Multistate Trial Begins
Meta Platforms is facing a critical juncture in its battle over youth online safety. Just weeks after suffering a massive legal defeat in New Mexico, the parent company of Facebook and Instagram is now defending itself in a California federal court against a bipartisan coalition of 29 states. The states say Meta deliberately designed its platforms to addict children and harvested their data in violation of federal law.
The California ShowdownA sweeping multistate trial opens Tuesday in Oakland, California, overseen by U.S. District Judge Yvonne Gonzalez Rogers. Attorneys for Colorado, California, New Jersey and Kentucky - leading a bipartisan group of 29 states - will deliver opening statements. Those four states' claims about addictive design and deceptive marketing are what this trial tests, while all 29 states are involved over data-harvesting claims.
Interestingly - the eight-person jury hearing the case won't actually decide it. Rogers empaneled it in a purely advisory capacity, which is rare. The jurors will answer specific questions she selects, and she is free to disregard their findings entirely when she issues her ruling after the trial concludes in October, Reuters reports.
The states argue that features like infinite scroll were purposely engineered to keep young users hooked, that Meta misled the public about the safety of its platforms for adolescents, and that the company improperly collected and monetized children's personal data in violation of federal law.
The financial exposure is the largest of any case Meta has faced. The company has warned that maximum statutory penalties could theoretically reach $1.4 trillion, while the attorneys general have indicated they may seek around $200 billion.
A Reuters/Ipsos poll released last week found that 85 percent of Americans believe social media can be addictive for children.
Beyond money, the coalition wants nationwide structural changes: age restrictions, deletion of algorithms and AI models built with children's data, elimination of infinite scroll and notifications, strict time limits for young users, and an algorithm retuned to prioritize well-being over engagement. Meta CEO Mark Zuckerberg and Instagram head Adam Mosseri are both expected to testify, alongside former employees and outside experts.
What Happened In New MexicoThe multistate trial arrives on the heels of a devastating legal blow in New Mexico. On Aug. 6, State Judge Bryan Biedscheid ruled that Meta had created a public nuisance and ordered the company to pay $567 million into a youth mental health fund, allocating $420 million to treatment, $90 million to screening and assessment, $33 million to prevention and awareness, and $15 million to referrals and care coordination over five years. The award followed a $375 million penalty a New Mexico jury imposed in March for violations of the state's Unfair Practices Act.
The award fell well short of New Mexico's request. The state had sought $1 billion toward a $3.7 billion plan to expand children's mental health services.
"The Court finds that the weight of the evidence presented demonstrates that Meta's platforms are a cause of and substantial contributing factor to the youth mental health crisis in New Mexico."
Biedscheid compared the platforms to a polluting factory, writing that the harms "do not stay contained" but migrate "to the real world" and burden families, schools, hospitals and law enforcement.
The order, a win for New Mexico Attorney General Raul Torrez, also imposes five years of operational changes: monthly limits on teen use of Facebook and Instagram, restrictions on notifications, tighter controls on adult contact with minors, safeguards for AI chatbots, and enhanced review of child sexual abuse reports. Meta must file written progress reports twice a year. The template is now sitting in front of the 29-state coalition.
Meta's DefenseMeta plans to appeal the New Mexico ruling and maintains that the attorneys general in the California trial are chasing an "outlandish payout" without proof of actual harm. "We remain confident in our record of protecting teens online and will continue to defend ourselves against claims that misrepresent the facts," the company said after the New Mexico decision.
The company argues it has invested heavily in creating a safe environment for teens, employing child safety experts and deploying technology to root out predators and harmful content. Company spokespeople have characterized the state lawsuits as an attempt to penalize Meta for industry-wide problems, such as the complexities of age verification.
The litigation traces back to 2021, when whistleblower Frances Haugen testified before the U.S. Senate and provided internal documents indicating Meta knew its platforms could harm young users but prioritized engagement over safety.
Meta is not alone. Alongside Snap, TikTok parent ByteDance and YouTube parent Alphabet, it faces more than 3,000 federal lawsuits consolidated before Rogers and another 3,300 pending in Los Angeles state court. Eight states, including Tennessee and Arkansas, opted out of the federal case and filed in their own courts. Tennessee's trial is already underway.
Meta has told investors that legal and regulatory blowback over youth safety "could significantly impact our business and financial results."
Tyler Durden Tue, 08/18/2026 - 10:40California egg producer ID’d as source of salmonella outbreak: health officials
Hayden Panettiere’s ‘Nashville’ co-star Charles Esten reveals ‘strange coincidence’ regarding late actress’ death in tribute
Hayden Panettiere’s ‘Nashville’ co-star Charles Esten reveals ‘strange coincidence’ regarding late actress’ death in tribute
Nvidia Confirms It Will Back Massive 4.25GW SoftBank Data Center In Ohio For $105 Billion
Nvidia has confirmed reports that it is financially backing SoftBank's massive data center at the Portsmouth Site in Pike County, Ohio, with up to $105 billion in financing, a securities filing revealed on Monday.
The project, led by SB Energy, is set to be fully leased to OpenAI. The facility could grow to 10GW, making it the world's largest data center, but Nvidia will initially support the first 4.25GW, DataCenterDynamics reported.
In a LinkedIn post, Nvidia CEO and founder Jensen Huang confirmed that his company would partner with SB Energy to help secure land, power, and shell (LPS) capacity at the Department of Energy (DOE) site.
The GPU giant will provide a $105bn backstop for the project, helping lower debt costs, similar to previous SPV project financings and reusing the structure popularized by Meta in late 2025 with its Project Beignet off balance sheet structure to fund its massive Hyperion data center . It had initially planned to support as much as $250bn, but faced investor pushback over the extent of the risk.
As a reminder, META is already neck deep in off-balance sheet debt. Here is a schematic of its $27.3 billion SPV with Blue Owl "Project Beignet" for the Hyperion data center. None of this touches META's balance sheet.
Expect hundreds of billions of these in 2026 https://t.co/794EgSiiZ9 pic.twitter.com/7hMyVW6Lno
Nvidia will also invest $1.5bn in SB Energy, down from a reported $3bn. The SoftBank subsidiary, which is preparing for an IPO, is set to build 10GW of new power generation, including 9.2GW of natural gas generation, to power the facility. This will provide up to 8GW of total IT load.
SB Energy and SoftBank also plan to invest at least $4.2bn in new regional grid infrastructure through a partnership with AEP Ohio they say is designed to protect ratepayers.
"Nvidia is supporting the LPS infrastructure at Ports-Pike for approximately 4GW over a 20-year term, securing a site on which Nvidia compute will be exclusively deployed," Huang said.
"Our support is limited to defined portions of lease and power payments, along with a specified residual-value commitment — not the full cost of the site or all of the tenant’s obligations. The guarantee will become effective in phases as data centers are placed in service between 2028 and 2030. As OpenAI makes lease payments and capacity comes online, Nvidia's remaining exposure declines."
Huang said that most companies will secure LPS independently, and then buy Nvidia gear, but that leading AI labs are "growing faster than their balance sheets and long-term credit profiles can support.
Ports-Pike will not only exclusively feature Nvidia GPUs, but also the company's full-stack DSX AI factory platform, including CPUs, networking, and infrastructure software. Over 20 years, it is expected to feature multiple generations of Nvidia gear.
"Each generation of Nvidia AI factory systems deployed at Ports-Pike could represent approximately 1.5 million Nvidia GPUs, or approximately $150 billion to $200 billion in Nvidia revenue," he said.
The company may yet decide to secure the remaining capacity of 3.75GW at the site.
Huang claimed that the deal was not an example of circular financing, an accusation the company has increasingly faced as it has funneled its profits back into the AI companies that buy its hardware.
"Nvidia uses its scale and long-term visibility to secure Ports-Pike to host Nvidia compute," he said. "This is the same discipline we apply to supply-chain management: we secure critical inputs when we have visibility into customer demand and when doing so enables long-term productive capacity."
Tyler Durden Tue, 08/18/2026 - 10:25Trump posts map labeling Strait of Hormuz ‘new US territory’ before announcing no talks with Iran planned
CNN primetime star Abby Phillip makes major decision about her future at the network
Teen best friends killed in horrific crash after their vehicle split in half
US Pending Home Sales Plunge Back Near Record Lows In July
Following another disappointment in existing home sales in July, weak homebuilder sentiment, and plunging housing starts, pending home sales tumbled for the second month in a row in July (-2.3% MoM vs 0.0% exp - below thew worst forecast), dragging sales down 2.5% YoY - the biggest annual drop since April 2025...
This decline matches the second-worst reading in data back to 2001...
“The highest mortgage rates of the year hit right in the middle of summer, and that’s pulling back contract signings,” NAR Chief Economist Lawrence Yun said in a statement.
“Home prices are at record highs so houses for sale are sitting on the market longer, and fewer buyers are bidding above the asking price than a year ago, though there are large local market variations.”
All four major US regions experienced a decline in demand during the month.
An index of pending sales in the South, the nation’s biggest home-selling region, decreased 2.2% to the lowest level since January 2025. Pending sales dropped 4.7% in the West.
As a reminder, because houses typically go under contract a month or two before they’re sold, the pending home sales data tend to be a leading indicator of closings that are captured in the monthly previously owned home sales reports.
Translation - this is terrible news building on an already ugly situation in the US housing market.
Tyler Durden Tue, 08/18/2026 - 10:13Mom influencer bashed for bringing baby to ‘dangerous’ gym workout: ‘Absolutely insane’
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Home Depot Earnings Offer Glimmer Of Hope As Small Projects Offset Renovation Downturn
Home Depot reported stronger-than-expected second-quarter sales and profit as homeowners spent money on smaller do-it-yourself projects, giving the home-improvement retailer enough confidence to reaffirm its full-year outlook.
The frozen housing market, combined with elevated borrowing costs, has deterred homeowners from financing larger renovations, such as replacing exterior windows and doors or installing a new deck, and has also pressured Home Depot shares over the past year and a half.
However, second-quarter demand showed signs of resilience in smaller projects, including ceiling fan replacements, landscaping, gardening, and electrical upgrades.
"They are engaged in smaller projects, but we haven't yet seen that combination of factors that unlocks larger projects," CFO Richard McPhail said in an interview.
Comparable sales increased 1.7% in the quarter, beating the Bloomberg consensus estimate for a 0.94% gain. Revenue rose 5.7% to $47.86 billion, while adjusted earnings of $4.92 a share topped the $4.73 consensus estimate.
Here's a snapshot of 2Q earnings:
- Comparable sales +1.7%, estimate +0.94% (Bloomberg Consensus)
- US comparable sales +1.3%, estimate +0.85%
- Net sales $47.86 billion, +5.7% y/y, estimate $47.33 billion
- Adjusted EPS $4.92 vs. $4.68 y/y, estimate $4.73
- EPS $4.79 vs. $4.58 y/y
- Average ticket sales $92.50, +2.8% y/y, estimate $91.70
- Merchandise inventories $26.85 billion, estimate $26.29 billion
- Total location count 2,364, estimate 2,365
- SG&A expense $8.42 billion, +8.5% y/y, estimate $8.17 billion
Home Depot maintained its forecast for annual revenue growth of 2.5% to 4.5%, with comparable sales ranging from unchanged to 2% higher. The company said tariff refunds should help offset rising fuel costs.
Barclays analyst Seth Sigman told clients, "HD reported better 2Q26 results, with broad-based demand driving better sales, while EPS was well managed and benefited from tariff refunds. The sales improvement should be the key takeaway as trends continue to gradually improve despite limited progress on the housing front."
Home Depot shares are up a little more than 2% in premarket trading. Shares are flat on the year and about 21% below their 2024 peak.
DA Davidson analyst Michael Baker wrote earlier today that the earnings results "doesn't mean we're out of the woods yet with respect to home-related spending, particularly as rates continue to move back up." He noted, "But it does show that the worst of the cycle downtrend is likely behind us."
Tyler Durden Tue, 08/18/2026 - 10:05