Mark Zuckerberg has an image problem - so why is Meta's business booming?

Mark Zuckerberg was only three minutes into his keynote at the company’s annual Meta Connect product event last month when his tone became almost wistful.

"Building is an act of love," he said, looking down at the floor with his hands in his pockets. "It's how we impart what we believe, and we pour our hearts and our souls into what we make."

Addressing hundreds of analysts and developers, Zuckerberg then unveiled Meta’s latest AI offerings: its new agentic chatbot Muse, a range of smart glasses, and a Tamagotchi-like AI device that users can wear on their wrists.

It was a conference about new technology - yet it is still notable that in a presentation lasting nearly an hour, Zuckerberg never mentioned two of Meta’s most successful products, Instagram and Facebook, the social media platforms that have helped turn Meta into a $2tn company.

For much of the past year, Meta has been caught up in a wave of legal challenges, accused of intentionally designing products that are addictive for young users.

That has prompted the release of internal emails, company documents and whistleblower testimony, all of which personal injury lawyers and prosecutors around the US have used to support their claims.

Zuckerberg himself is unpopular: last year, a Pew Research Center poll found that two-thirds of Americans held an unfavourable view of him.

This year Meta introduced Muse, its AI companion app, together with a Tamagotchi-like wearable device that lets users speak to it

His standing is unlikely to improve with The Social Reckoning, a film by Aaron Sorkin released this week. It centres on whistleblower allegations that Meta executives knew their products were harming young people. Succession actor Jeremy Strong portrays Zuckerberg as a "full-on villain", according to a Hollywood Reporter review, "stoically arguing that even the slightest gesture of responsibility is anathema where money is concerned".

Some believe this is Meta’s "Big Tobacco" moment, with a growing consensus against the company and the social media sector more broadly.

But the reality appears more complicated. Despite months of negative coverage, Meta’s products are performing better than ever in the real world. Usage of its apps keeps climbing, and users are already rushing to its new AI assistant.

That raises the question: can anything truly slow Meta down? Or has it become a kind of "Teflon" company, with scandals simply sliding off?

It has certainly been a year full of bad headlines for Meta.

Last summer, Reuters reported that Meta allowed its chatbots to "engage a child in conversations that are romantic or sensual", and to give users false medical information.

Meta has since changed those policies and said such responses should never have been permitted.

And this year, the legal costs have mounted. In March, a jury awarded $6m (£4.5m) to a 20-year-old California woman who said she suffered mental health harm linked to her use of Meta’s Instagram and Google’s YouTube.

Around the same time, New Mexico became the first state to win a lawsuit against Meta over child safety concerns. A jury found the company had failed to warn the public about the risks its platforms posed to children. Meta was fined a total of $942m. The judge described Meta as a "public nuisance" comparable to air pollution.

Meta says it disagrees with the verdicts and is appealing both cases.

Succession actor Jeremy Strong plays Zuckerberg as a "full-on villain", according to one review of The Social Reckoning

In May, Meta was among the social media companies that avoided a trial by settling a case filed by a Kentucky school district, which argued that product design had contributed to a youth mental health crisis. Meta reportedly agreed to pay $9m, the largest amount of any defendant.

Then this summer, Meta reached a high-profile $18bn settlement with 48 US states, plus the District of Columbia and three US territories. As part of the settlement, Meta denied wrongdoing, and during the five-day trial it said it had spent years working to make its platforms safer for young users, investing heavily in testing and research. Under the agreement, the company pledged two-hour daily limits for young users, along with nighttime restrictions, muted notifications during school hours and other changes.

The company also faces additional lawsuits, including one due to begin later this month in Los Angeles, again tied to alleged social media addiction among young users.

At the same time, several countries have moved to ban social media for children altogether, beginning with Australia last December. Social media companies are widely disliked, even though their products remain hugely popular. A Reuters/Ipsos survey found that 85% of Americans believe social media can be addictive for children, while 61% support stronger government oversight.

Meta faces lawsuits over its treatment of young social media users. Outside one California case this summer, protesters displayed the names of young people they say died because of social media harms. Meta disputes many of the allegations

For some, the trust problem feels existential.

"Once the public has stopped trusting you, it's kind of a downward spiral," says Alison Taylor, associate professor at New York University’s Stern School of Business.

"It feels like… the trust deficit is so big, I just don't know that they're going to be able to recover."

Yet despite those headline-grabbing cases, the company said the number of people using some of its apps, such as Instagram and WhatsApp, rose 3% year on year, and second-quarter revenue this year was up 28% from the same period in 2025.

Although it has agreed to ease its push into the teen market, which many brands aggressively target to secure future users, Meta has said teenagers accounted for less than 1% of its revenue anyway. TikTok and Google’s YouTube are more popular with younger users.

And the settlement with the 48 states was widely seen as a major win for Meta, because it spared some of its top executives, including Zuckerberg, from testifying, blocked the release of more internal documents, and allowed the company to avoid admitting wrongdoing. The stock jumped 4% immediately after the announcement and is up more than 25% over the past month.

One argument common among critics is that the company has tested how much bad behaviour consumers will tolerate, and so far its business has largely absorbed the backlash. In other words, people keep using the products even if they dislike the company.

"I think they're in a remarkably good position that I didn't expect them to be in," says Patrick Moorhead, founder and CEO of Moor Insights & Strategy.

Still, Meta’s push into AI depends in part on restoring public trust.

Last month, the company launched Muse, its new AI personal assistant app. Importantly, Muse is an AI agent, meaning it can complete tasks in several stages and keep working on something over hours, unlike chatbots such as ChatGPT, which usually handle one task at a time.

It is the first AI agent from a major tech company to be publicly released. A New York Times tech reporter who used it for two weeks said he was "blown away"; the app called his dental insurer for him, ordered groceries and tracked his credit card spending in a spreadsheet.

But Muse works best when users give Meta some of their most personal data, including credit card details, purchase histories and access to email inboxes.

That is a significant request for a company whose privacy reputation was damaged a decade ago by the Cambridge Analytica scandal, after it emerged that the data of millions of Facebook users had been breached and used by a political consulting firm.

Zuckerberg launched Facebook in 2004, at age 19, while studying at Harvard University

Just two days after Zuckerberg’s keynote at Meta Connect, another New Mexico jury found that Meta had lied about how Facebook used personal information. The company says it disagrees with the verdict and will defend itself against what it calls attempts to distort its record.

So are customers prepared to hand over that data in exchange for the convenience Muse offers?

Some users say yes. Since launching a month ago, Muse has already been downloaded more than five million times and has more than three million weekly active users - ahead of ChatGPT’s early adoption in the North American market.

Zuckerberg has outlined a vision in which Muse works alongside an ever-growing lineup of Meta AI smart glasses, allowing users to summon what he calls "personal superintelligence" hands-free.

Meta clearly has major ambitions for its smart glasses. "I think they're making an investment to position themselves as a category leader," says Kate Winick, principal analyst at Forrester, who covers social media and influencers. "However big this category turns out to be, they will own it - for now."

Zuckerberg attended President Trump's inauguration ceremony last year, along with Elon Musk and Amazon founder Jeff Bezos

The glasses are controversial, and some have dubbed them "pervert glasses" because they can be used for covert filming. Meta has tried to prevent users from tampering with the light that shows when a photo or video is being recorded. Zuckerberg also recently announced new audio-only smart glasses, apparently in an effort to ease privacy worries.

But the company’s fiercest critics remain unconvinced.

"Consumers know that Meta has problems, and that to date we haven't been able to trust them to make their products safe for children. So why would a consumer want to trust them with some of their most private and sensitive information?" says Brooke Istook of the Heat Initiative, a campaign group.

In his speech, Zuckerberg briefly touched on privacy. At one point, an image appeared on the screen behind him of Muse’s mascot hugging a blue padlock.

"Given how personal Muse and the content on your glasses is, we designed state-of-the-art privacy and security into all these systems from the beginning," Zuckerberg told the audience.

He pointed to a personal virtual machine - essentially a self-contained computer system operating inside Meta’s cloud, where the company says Muse users’ data will be stored. Zuckerberg promised it would keep every customer’s information secure, and that soon "even Meta won't be able to see that information". He said the virtual machine will launch later this year, with more privacy protections to follow.

Meta’s emphasis on privacy and security appears designed to reassure users. But Winick says people still have to choose to activate many of those protections. "I think if they thought they could get away with not doing that, they would," she says.

Soon after Zuckerberg took the stage in California, social media users began reporting instances of Muse behaving erratically, including claims that the agent read emails without permission. Meta has rejected those reports, saying it does not believe Muse accesses emails unless a user has consented.

Campaigners celebrated in Los Angeles earlier this year after a US jury found Meta and YouTube liable in a social media addiction trial

In the end, many users may be willing to give up some privacy if the payoff is convenience and usefulness, Moorhead says. "If the consumer sees the trade-off as beneficial, then they'll keep it going," he says. "This is why Facebook and Instagram still have billions of users."

Financially, the social media advertising business - Meta’s cash cow - continues to generate substantial revenue. Meta reported $60.8bn in revenue and $15.9bn in profit for the second quarter of this year.

Steady profits have helped bankroll bets ranging from the much-ridiculed Metaverse to its current large-scale buildout of AI infrastructure.

And as for Muse? "It's a very real time-saving benefit that a lot of people will want and will like," says Winick.

AI investment is expensive. Meta now has $83.7bn in long-term debt, according to its latest financial statement.

Even so, Meta executives remain optimistic about the company’s shift toward AI. "It's really about your agent, who can do work on your behalf, who is your constant ally in whatever you're trying to accomplish in your goals in your life," Andrew Bosworth, the company’s chief technology officer, said in an interview with the BBC.

Meta has big ambitions. But its future may ultimately hinge on whether users trust it.