00:00As similar lawsuits move forward, it is unclear at this point whether these rulings will force real change across social
00:06media.
00:07Dan Ives is Senior Tech Analyst at Wedbush Securities in New York.
00:10Joining us now, hello Dan.
00:12So, from your perspective, how significant could these cases be for tech companies?
00:17Many people say they are precedent-setting.
00:20It's a black eye.
00:21I mean, for social media, for Meta, Google.
00:24Look, I mean, some will compare maybe to cigarette companies.
00:27You know, if you go back, you know, decades ago.
00:30But it's going to open up an avalanche of these lawsuits, which could be billions of dollars that they're going
00:35to have to pay.
00:37You know, so everyone's saying this could become tech's so-called tobacco moment, a realization that these products were actually
00:45designed for addiction.
00:47If it comes to that, what are you seeing for the bottom line?
00:52Yeah, I don't see it coming to that point.
00:54I think just given, you know, so much that Meta and Google have done, they have done so many things
01:02to try to, you know, put guardrails in the platforms.
01:06They're going to have to pay lawsuits.
01:07But the reality is that they're going to have to change some of their business model and practices.
01:13But it's like I said, it's going to be billions of dollars.
01:17I mean, the whole model is based on how long you keep someone's attention.
01:21The algorithms, it seems, were designed that way.
01:24So does that suggest that they're going to have to completely redesign these platforms?
01:31Yeah, I don't think.
01:32Look, and now we're talking about billions that are on the platform, right?
01:35So it's almost like, you know, this sort of genie's out of the bottle, you know, when it comes to
01:41this.
01:41I think the question is, like, do you start to have more age restrictions, kind of like they're having in
01:46Australia?
01:47I think that is probably more the route that we could see rather than a quote-unquote business model change.
01:55We are, we've seen tech firms booming.
01:57But we heard from Mitch that Meta, I think, is down 6% today.
02:03Do you think that that's just a blip or do you think that investors should apply some caution now?
02:09Look, I think it's a blip relative to the longer-term focus because my view when it comes to AI
02:15revolution,
02:16this is really going to be Zuckerberg Meta's opportunity to monetize the billions of users.
02:20But you can just look at this lightly.
02:23This is definitely a gut punch.
02:24The stock should be down.
02:26And I think it may be caught investors offside the level that they lost, you know, in this initial lawsuit.
02:33We've got a lot of these lawsuits now coming into play.
02:38What do you anticipate for the next sort of three to six months,
02:41bearing in mind that this case that everyone says is precedent-setting is going to be appealed?
02:46Yeah, this will be in probably in the courts for years to come, right?
02:49So it would probably go in the background.
02:51Look, could there be more class-action lawsuits?
02:54Definitely, but I think it's something where, to some extent, you'll see more political involvement
03:01when it comes to bills, underage, and others in terms of social media.
03:06Look, this is not what investors wanted.
03:09It's not what Meta wanted.
03:10But Bama is the 12 jurors.
03:13That's what they decide.
03:14We know that there's been a lot of investment in AI,
03:18and companies are really betting on that to bring more profitability.
03:23Now we've got two potential unknowns in this mix.
03:26What is your forecast?
03:29Look, it's a white-knuckle moment.
03:30But the trillions of dollars that are going to be spent in the AI revolution,
03:34that's not changing.
03:35That's going to change the consumer.
03:37It's going to change the enterprise for decades to come.
03:41But when we look at this geopolitical,
03:43and you look at maybe some of the legal sort of guardrails,
03:47this is going to be a tightrope for big tech to navigate.
03:51All right.
03:51Thank you so much for speaking to us.
03:53Much appreciated.
03:54Dan Ives, Senior Tech Analyst at Wedbush Securities in New York.
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