New Mexico AG Warns AI Companies After Winning a $25 Billion Judgment Against Meta

New Mexico Attorney General Raúl Torrez says artificial intelligence companies should expect close scrutiny of the claims they make about their products, after his office secured a $25 billion judgment against Meta over allegations that it misled users about privacy protections, Focal News reported on October 22. Speaking in Albuquerque on October 21, a day after the ruling, Torrez said the verdict was “not the end” of the state's enforcement against the technology industry.

What the case was about

New Mexico's case focused on Meta's public assurances about privacy after the 2018 Cambridge Analytica scandal, when a whistleblower revealed that Facebook user data had been collected and shared with a political consulting firm. Rather than suing over the underlying data exposure, the state argued that those statements deceived consumers. At trial, privacy researcher Serge Egelman testified that Meta carried out only 14 forensic data audits even though an internal investigation identified thousands of instances of suspicious activity. Meta chief legal officer CJ Mahoney said the verdict would make it “all but impossible to do business” in New Mexico, and the company plans to appeal.

Why AI companies are listening

New Mexico declined to join a $17 billion multistate settlement with Meta in August. Torrez argued that trials can make internal records public while settlements may keep them confidential, and that penalties must be large enough to change how big companies weigh breaking the rules. Because every state has a consumer protection law, the deception-based approach could be copied even where privacy and AI rules differ. Nidhi Hegde of the American Economic Liberties Project said the strategy avoids content and speech questions where tech firms have strong defenses. The case did not involve an AI company, but Torrez said his office is ready to bring similar actions if warranted.

State officials are already testing those tools against AI developers, from the eight-state lawsuit alleging ChatGPT is unsafe for kids to California's subpoena to OpenAI over AI model hacks. At the federal level, the FTC's subpoenas to OpenAI and Anthropic probe similar consumer-harm questions.

What to watch

Whether Meta's appeal narrows the $25 billion award, whether other attorneys general bring deception claims over AI marketing, and whether Texas and Florida, the other states that declined to settle claims over Meta's handling of children's safety, addictive design and privacy, take their cases to trial.