Meta (META) faces trial over stolen AI trade secrets

Meta (NASDAQ: META), the parent company of Instagram, Facebook, and WhatsApp, failed on Monday to end a lawsuit in Boston federal court claiming the company stole confidential information from AI startup Neural Magic Inc.

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

U.S. District Judge Denise Casper said, the social media company will have to face a trial over accusations that it took Neural Magic's "breakthrough" algorithms that enable AI systems to process information more quickly.

Neural Magic sued Meta (formerly known as Facebook) in 2020 for allegedly stealing algorithms that enable simpler computers to run complex mathematical calculations more efficiently and allow research scientists to use larger data sets.

The lawsuit claims that Meta hired away Neural Magic computer scientist, Aleksandar Zlateski, who allegedly gave the social-media giant 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.

However, Judge Casper rejected Neural Magic's claims that Meta violated a non-compete clause or engaged in unfair business practices under Massachusetts law.

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

By Michael Elkins | [email protected]

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