Menlo Park: Mark Zuckerberg’s reputation is facing renewed scrutiny over allegations that Meta’s platforms have harmed young users, but the company’s financial performance and growing investment in artificial intelligence suggest that the backlash has done little to slow its business.
The release of The Social Reckoning, a film revisiting claims that Meta executives knew about potential harms associated with their products, has brought fresh attention to the company’s record on child safety and privacy. Meanwhile, Meta continues to expand its artificial intelligence offerings, including its Muse personal assistant and a growing range of smart glasses.
The contrast is striking. While critics question whether Meta can regain public trust, its apps continue to attract billions of users and its advertising business remains highly profitable.
Meta’s second-quarter 2026 results underline that resilience. The company reported revenue of $60.8 billion, up 28 per cent from the same period a year earlier, even as its spending on infrastructure, legal matters and artificial intelligence increased.
Zuckerberg faces a growing trust deficit
Zuckerberg opened his keynote at the annual Meta Connect event with a reflection on the purpose of building technology.
“Building is an act of love,” he told the audience, describing the effort and commitment that go into creating products.
The presentation focused on Meta’s latest technology, including Muse, AI-powered smart glasses and a wearable AI device. However, the company’s expanding product ambitions come against a backdrop of legal disputes and public concern about the effects of social media on children.
Last year, Reuters reported that Meta’s chatbot policies had allowed certain interactions involving children that included romantic or sensual conversations, as well as responses containing false medical information. Meta subsequently revised its policies and said such responses should never have been permitted.
The company has also faced allegations that its platforms were designed in ways that encourage excessive use among young people. Lawsuits have brought internal documents, employee testimony and questions about how Meta assessed the potential effects of its products into public view.
The film The Social Reckoning has added another dimension to the controversy by dramatising whistleblower claims about what executives knew concerning the possible harms to young users.
For Meta, the challenge is not simply managing negative headlines. It is convincing users, regulators and advertisers that its products can be trusted.
Legal cases add to pressure over child safety
Meta has faced several significant legal setbacks and settlements in the United States.
In March 2026, a California jury awarded $6 million to a 20-year-old woman who alleged that her use of Instagram and YouTube had contributed to mental health problems. The case also involved Google, and the verdict added to wider legal scrutiny of social media companies.
New Mexico also secured a major verdict against Meta in a child-safety case. A jury found that the company had failed to warn the public about dangers its platforms posed to children, resulting in a penalty of $942 million. Meta disputed the findings and said it would appeal.
In August, Meta agreed to pay up to $18 billion over the next decade under settlements with nearly all US states over claims that Facebook and Instagram were designed to addict children. The company denied wrongdoing.
The settlement includes measures intended to restrict teenagers’ use of the platforms, including daily usage limits, overnight restrictions and limits on notifications during school hours. The agreement also avoids a prolonged trial involving the participating states, although other legal disputes remain unresolved.
Florida, which did not join the settlement, is pursuing stricter court-ordered safeguards for teenagers. The state has asked a court to impose additional restrictions on Facebook and Instagram while its case continues.
The legal developments have increased pressure on Meta to demonstrate that its safety measures are effective. They have not, however, prevented the company from continuing to grow.
Why Meta’s business continues to grow
Despite the controversies, Meta’s apps remain deeply embedded in everyday digital life.
The company reported that an average of 3.6 billion people used at least one of its family of apps daily in June 2026, an increase of 3 per cent year on year. The figure includes services such as Facebook, Instagram, WhatsApp and Messenger.
Meta’s second-quarter revenue reached $60.8 billion, compared with $47.52 billion in the same quarter of 2025. Net income was $15.85 billion, although that was down from $18.34 billion a year earlier.
Advertising remains the main engine of the business. Meta reported that advertising impressions across its family of apps increased by 14 per cent year on year, while the average price per advertisement rose by 12 per cent.
These figures help explain why reputational problems have not immediately translated into a decline in revenue. Advertisers continue to use Meta’s platforms to reach large audiences, while the company’s extensive user base gives it considerable reach across markets and age groups.
The business also benefits from the fact that users may continue using a service even when they have concerns about the company operating it. For many people, Instagram and WhatsApp are part of their daily routines, making them difficult to replace entirely.
The financial strength behind Meta’s AI ambitions
Meta’s established advertising business is also helping fund its push into artificial intelligence.
The company is spending heavily on data centres, computing infrastructure and AI development as it competes with rivals such as OpenAI, Google and other technology companies.
Its second-quarter results show the scale of that investment. Capital expenditure, including principal payments on finance leases, reached $31.08 billion during the quarter. Total costs and expenses rose by 55 per cent year on year to $42.03 billion, reflecting higher infrastructure spending and other costs, including legal charges.
Meta’s AI strategy is therefore being supported by a large and profitable core business, even as the company commits substantial resources to technologies whose long-term commercial returns remain uncertain.
The investment is intended not only to improve existing services but also to create new ways for users to interact with Meta’s platforms.
Muse offers convenience but raises privacy questions
One of Meta’s most ambitious recent launches is Muse, its AI personal assistant.
Unlike a conventional chatbot that mainly responds to individual prompts, an AI agent can carry out tasks through multiple steps. Depending on the permissions granted, such a system may help users manage information, organise activities and complete routine tasks.
Muse has attracted early interest. Reporting by The Information in September said it had more than three million weekly users submitting prompts, with more than four million people interacting with the assistant in some way each week. Those figures indicate a promising start, although they remain small compared with the billions of people who use Meta’s established apps.
The potential benefit is convenience. An assistant capable of completing tasks on a user’s behalf could become a regular part of everyday life, giving Meta another way to engage consumers beyond traditional social media.
But that model also creates a significant privacy challenge.
To be useful, an AI agent may need access to sensitive information, such as email, shopping histories, calendars or payment details. Users must be confident that the system will handle that information securely and act only within the permissions they have granted.
Meta’s history of privacy controversies, including the Cambridge Analytica scandal, makes that trust especially important. Reports of unexpected behaviour by AI agents have also reinforced questions about how much access users should provide and how clearly companies explain what their systems can do.
Meta has said it is developing additional privacy and security protections for its AI products. Whether those safeguards are sufficient will be central to convincing users to rely on the assistant for more sensitive tasks.
Smart glasses could create another growth market
Meta is also betting on AI-powered smart glasses.
The devices aim to combine wearable technology with hands-free access to digital assistance, allowing users to interact with AI without constantly reaching for a smartphone.
The company sees the category as a potential growth opportunity, particularly if users begin to treat wearable assistants as everyday tools rather than occasional gadgets.
However, the technology raises its own privacy concerns. Cameras and recording capabilities built into glasses can make people nearby uneasy, particularly if they are unsure when they are being recorded.
Meta has introduced measures intended to make recording more visible and has also announced audio-focused glasses, which avoid the need for a camera. Even so, the company will need to balance new features with clear safeguards and public acceptance.
Success in wearables could give Meta another source of growth. But adoption will depend not only on the usefulness of the products but also on whether consumers are comfortable with the technology and the company behind it.
Can Meta recover public trust?
Meta’s business performance shows that reputational damage does not automatically translate into weaker financial results.
Its platforms continue to attract billions of daily users, advertising revenue is rising, and the company has the financial resources to invest heavily in AI. The launch of Muse and the development of smart glasses also give Meta opportunities to expand beyond its traditional social media business.
Yet the company faces a different challenge in persuading people to trust products that may require access to increasingly personal information.
Users may tolerate advertising and continue using familiar social platforms despite criticism of the company. Handing an AI assistant access to private communications, financial information or other sensitive data requires a different level of confidence.
The legal disputes over child safety also remain important. Settlements and changes to platform rules may reduce some immediate risks, but they do not by themselves settle the wider debate about how social media affects young people or whether technology companies have done enough to protect them.
For Meta, sustained growth will depend on more than attracting users and increasing advertising revenue. It will also need to show that its AI products deliver genuine value while protecting privacy and providing effective safeguards.
The company’s financial strength has helped it withstand years of criticism. Whether that resilience continues as AI agents become more personal and powerful may depend on a question that revenue figures alone cannot answer: how much trust are users willing to place in Meta?