Meta Platforms (META) is procrastinating signing the Voluntary EU AI (artificial intelligence) Pact before it becomes a new law in 2027. The European Union has laid out rules that aim to regulate the fast-growing AI industry and the risks that could emerge in this developing market. Meta might join the pact at a later stage as it is currently evaluating compliance under the AI Act, a company spokesperson said.
Since the AI Pact is voluntary and non-binding currently, it would not penalize companies that do not sign. However, these companies could be at risk of facing heightened scrutiny from the bloc’s regulatory authorities.
More About Meta and the EU AI Pact
Meta hosts its own LLM (large language model) program, Llama, which is an open-source model. The nature of the model enables users to repurpose it without much intervention from the developer. The company believes that this open-source feature makes compliance with the EU’s AI pact a bit more tedious. Hence, the company is taking time to study the implications. Meta has also delayed the launch of its next generation of AI models in the EU owing to the uncertain regulatory environment.
The EU will enact a new law based on rules that are expected to become fully effective in 2027. However, companies are voluntarily joining the pact ahead of the new law and pledging to comply with certain important rules. Some of these rules involve giving a detailed summary of the data used by the tech companies to train their AI models. Plus, companies will be required to disclose if their AI models find applications in “high risk” situations like education, employment, and policing.
Meanwhile, other American tech giants such as Microsoft (MSFT) and Alphabet (GOOGL) have agreed to sign the voluntary pact well in advance of the law’s enactment. Companies that sign the voluntary pledge could draw more trust from customers, investors, and regulators as they are willing to comply with standards. The European Commission, EU’s watchdog, is expected to release a full list of companies signing the voluntary AI Pact today.
What Is Meta’s Price Target?
The average Meta Platforms price target of $586.49 implies 4.1% upside potential from current levels. Also, META stock boasts a Strong Buy consensus rating on TipRanks, backed by 41 Buys, three Holds, and one Sell rating. Year-to-date, META shares have gained 59.6%.
