Meta's HHHH trial, the data center backlash turns bipartisan, Flash gets cheap again

00:00:04 California and 28 other states opened their case against Meta on Tuesday morning in Oakland. The message from the state's lead attorney was stark. Megan O'Neill told jurors that Meta's business boils down to four H-words: hook, hold, harvest, hide. She laid out exactly what that means in practice — hook users into the app, keep them there as long as possible, harvest their data, and hide what you're doing from public view.

00:00:34 That was the opening salvo. Over the next six to eight weeks, jurors will hear testimony including from CEO Mark Zuckerberg and Instagram head Adam Mosseri. The threat here is existential. If found liable, damages could reach 200 billion dollars — equal to Meta's entire 2025 annual revenue.

00:00:55 The states' case centers on allegations that the company violated US federal child privacy laws and state consumer protection statutes by collecting data on children under 13 without parental permission. They're also asking the court to force Meta to redesign its products in ways that make them safer for children, which could permanently alter how Facebook and Instagram operate.

00:01:22 Meta denies all allegations. Spokesperson Liza Crenshaw said the states decided to chase a wild payout rather than stick to the facts or the law. Lead attorney Paul Schmidt told jurors there's no dispute that people struggle with social media, but that Meta has put tools in place to address it.

00:01:43 He added the company disables accounts for users under 13 — over a million of them. The jury here is advisory only. Judge Yvonne Gonzalez Rogers will make the final decision on liability and damages. That's unusual enough to matter: this is structured as a trial that informs rather than decides, which means the legal standard for a winning case might differ from a standard civil trial.

00:02:11 The star witness in the first week was Arturo Béjar, a former Meta safety engineer who worked at the company across two stints between 2009 and 2021. Since leaving, he's been an outspoken critic, testifying before a US Senate committee and serving as an expert witness in other cases involving social media's harm to children.

00:02:34 His motivation is personal. His teenage daughter received unwanted sexual advances and photos on Instagram, along with misogynistic insults. She tried reporting these through established channels and found them completely ineffective. Béjar testified that Meta adopted a don't ask, don't tell strategy regarding child safety.

00:02:58 He said his job included briefing Zuckerberg more than 100 times during his tenure. During testimony, attorneys for California showed jurors an email Béjar sent to Zuckerberg in 2021. It laid out survey data showing that 51% of teen users reported harmful or bad experiences on Instagram within a week.

00:03:19 Content removal hit just 0.02% of the time. When asked why he sent it, Béjar said: "In my experience, when Mark makes something a priority, mountains move." Béjar's answer was straightforward. No. He didn't hear back. Meta fought hard to keep Béjar off the stand, filing multiple motions to strike his exhibits and prevent him from testifying.

00:03:51 All were rejected by the court. After his testimony wrapped, Meta sent an email to reporters calling his account not credible and unreliable, saying he overinflated his role and took credit for work he didn't do. The jury also heard recorded depositions from former user experience researchers Elena Davis and Natalie Troxel.

00:04:15 Psychology professor Jean Twenge took the stand for a brief time. Meta already lost the first two trials that went to jury. In March, New Mexico ordered nearly one billion dollars in penalties for allowing child sexual exploitation on its platforms. A separate plaintiff won more than 4 million dollars for a design that hooked one young woman into prolonged harm.

00:04:41 The Oakland case carries similar legal weight because it targets kids across the entire platform, and a loss could reshape how Facebook and Instagram are designed. The 200 billion dollar damages number matters on its own. That's the company's entire revenue from last year — not just a fine, but a complete financial hit.

00:05:04 This story started on Hacker News, where someone linked to Heatmap News tracking polling on data center opposition. The numbers have moved so fast that people who work with polling call them extraordinary. Back in February, 51% of respondents said no to a data center nearby.

00:05:24 That number jumped to 75% this month. Strong support fell from 9% down to 4%. Gallup found in May that 71% of respondents opposed data centers in their area, with 48% strongly opposed. Echelon polling showed Americans would rather have a nuclear power plant in their backyard than an AI facility.

00:05:46 People are about twice as likely to support coal plants being built near them compared to data centers. Strong opposition jumped from 24% to 61% in twelve months. Lobbyist Justin Slaughter wrote that he'd never seen anything like it — opponents converting supporters not just to neutral, but directly against the issue.

00:06:10 Another pollster asked when's the last time political opinions shifted this fast on any topic. By late 2025, this had become a strictly bipartisan issue. In August of 2025, Republicans held net support for nearby data centers. Independents sat at minus 5%. Democrats at minus 8%.

00:06:31 Now independents are at minus 65%, Democrats at minus 75%, and Republicans sit at net 43% against. Every major party line flipped during that twelve-month period. That's a total inversion, not a swing. Governors who once championed data centers are now competing to impose the strictest rules.

00:06:53 Pennsylvania's Josh Shapiro and Texas' Greg Abbott both reversed their positions. New York became the first state to pass a moratorium. Tracking firm Interconnected Capital has logged 97 county bans, 93 city bans, and 28 town bans so far. Puck News polling shows exactly what communities worry about.

00:07:16 When asked if data centers place too much strain on the local power grid, 78% said yes. Water consumption drew 75% agreement. Property values and noise disruption each hit 59%. Fifty-four percent cited a lack of local jobs to justify construction, and 48% agreed that these facilities increase local taxes.

00:07:39 Many of these concerns map directly to real infrastructure impacts. A warehouse-size computer plugged into industrial systems draws power, pulls water through evaporative towers and liquid loops, generates constant noise from cooling equipment, and sits on land that could serve other purposes.

00:08:01 Data centers are necessary for the internet — Gmail, Netflix streaming, everything online runs through them — but the debate is about which ones get built where, under what terms, and with how much community input. The conversation around who's behind the backlash reveals another layer.

00:08:22 Some point to China or foreign bot farms amplifying opposition on social media. Trae Stephens of Anduril retweeted Trump saying he'd want an AI plant if he were a local official, then added that not banning TikTok has real-world consequences and the population is being poisoned by CCP propaganda.

00:08:45 Shark Tank's Kevin O'Leary said China was behind activists opposing a data center in Utah. But dismissing the backlash as foreign interference is convenient. It lets proponents avoid the more uncomfortable questions about why communities feel they have no agency in hosting infrastructure that primarily serves distant tech elites.

00:09:10 Investor Chamath Palihapitiya wrote that frontier AI leadership has failed at basic communication — painting a positive picture of what's possible. Instead, he said, there's pearl-clutching, catastrophizing, and arcane jargon that breed mistrust. Writer T. Greer went further: AI just hasn't delivered tangible benefits nationwide.

00:09:35 Jasmine Sun's reporting on data center NDAs pulled my attention because it hits on a detail most people miss about this fight. She wrote that after talking to residents in communities hosting or asked to host these facilities, closed-loop cooling talk and billion-dollar tax promises just fall flat.

00:09:57 She said every claim about job creation meets immediate skepticism. The way AI companies engage with these communities — forcing NDAs, dangling promises, pushing environmental costs away from wealthy users — resembles dark money politics. She summed it up in one line: "It's not Skynet.

00:10:17 It's the oligarchy." The overall number sits at 27%. That covers nine categories, ranging from churches and the military to banks and big business. Big business itself sits at 17%. When you're already distrustful of institutions, a process that hides its details behind NDAs multiplies that distrust instead of addressing it.

00:10:48 Communities stop believing the technical content of data center deals because the deal-making process itself has destroyed credibility. The moratoriums are accelerating fast. Here's what to watch: which governor reverses next, and what conditions the next state imposes.

00:11:07 That's where the actual policy architecture is getting written.

00:11:12 Google appears to have realized their recent Flash price hikes missed the mark. They need more real-world agent traces to train their upcoming models. They slashed prices another 50% on OpenRouter for Gemini 3.7 Flash, putting it at 75% off list. With that discount, the Flash model moves the Pareto line on price-performance charts and beats both DeepSeek models.

00:11:36 Artificial Analysis hasn't factored the OpenRouter discounts into their data yet, so this shift won't show up there until an update drops. This feels like a calculated move: trade short-term margin for a massive volume of training data. Google is betting that getting millions of people to run agent workloads on Flash gives them more high-quality traces than they'd get from keeping prices higher and hoping fewer power users stay.

00:12:04 Keep an eye on whether this discount holds past the initial window. Once the traces flow in and the next model cycle starts, the pricing could snap back hard.