Meta scraps opt-out AI image feature after Hollywood backlash, faces layoff-bias suit

Two AI-governance flashpoints hit Meta this week. First, the company scrapped a new AI image feature just days after launch after Hollywood creators and studios revolted over its opt-out structure — meaning rights-holders' work could be used unless they actively removed it. The reversal echoes a recurring pattern of Meta shipping generative features fast and retreating under creative-industry pressure.

Second, and more legally serious, Reuters reported that 26 former employees filed suit alleging Meta used AI-powered software during mass layoffs that disproportionately targeted workers with disabilities or on medical leave. If proven, the case could become a landmark on algorithmic discrimination in HR — a domain where 'the model decided' is unlikely to shield an employer from disparate-impact claims.

The stories land amid a rougher stretch for Meta's AI reputation: The Register mocked the company for admitting an early 'superintelligence' effort was too unstable to survive three days, and Yann LeCun publicly reiterated at RAISE Summit that LLMs are a dead end for real-world reasoning ('a four-year-old has seen as much data as the biggest LLMs, except it's video'). Together they paint a company whose AI ambitions keep colliding with product, legal and scientific skepticism — even as it ships Muse Spark 1.1 and a paid Meta Model API.