Meta faces trial over stolen AI trade secrets

The parent company of Instagram, Facebook, and WhatsApp, Meta Platforms Inc (NASDAQ:META), could not resolve a case in federal court in Boston on Monday that claimed the company stole sensitive data from AI startup Neural Magic Inc.

According to an expert’s court testimony, Meta owes the startup about $766 million in royalties.

The social network business will have to go to trial over claims that it stole Neural Magic’s “breakthrough” algorithms, which allow AI systems to analyse information more quickly, according to U.S. District Judge Denise Casper.

In 2020, Neural Magic filed a lawsuit against Meta (formerly known as Facebook) for allegedly stealing methods that let more basic computers perform complicated mathematical operations more quickly and let researchers access greater data sets.

According to the lawsuit, Aleksandar Zlateski, a computer scientist at Neural Magic who Meta employed, is said to have provided the social media juggernaut with the algorithms.

Meta asked the court to throw out the case last year, arguing Neural Magic had failed to identify any protectable trade secrets and that Zlateski had not acquired the information improperly. But the court on Monday allowed Neural Magic’s case to continue on 40 of the 41 secrets it accused Meta of misappropriating.

Judge Casper, however, disregarded Neural Magic’s allegations that Meta had broken a non-compete agreement or practised unfair business methods in violation of Massachusetts law.

Shares of META are up 1.88% in mid-day trading on Tuesday.