Meta AI Chief Spurns 'World Model' Push Amid EU Probe, C3.ai Stocks Drip Lower

Yann LeCun, Meta's chief AI scientist and a pioneer in artificial intelligence, said the company will not be investing in the development of a "world model" startup, despite growing interest in such technologies within the broader AI community. The comment comes amid a broader industry push to develop more advanced, general-purpose AI models that can simulate complex real-world environments. Meta's decision reflects a strategic focus on refining existing AI infrastructure rather than pursuing speculative, large-scale modeling projects .

The announcement follows recent developments at C3.ai, a major player in enterprise AI software, which reported mixed but improving results in its latest quarter. The company's new CEO, Stephen Ehikian, has emphasized a renewed focus on sales execution and strategic partnerships, particularly in the federal sector. Despite a 20% year-over-year drop in revenue, C3.ai's guidance for the remainder of the year remains cautiously optimistic according to its latest report.

Analysts have noted that C3.ai's performance highlights the challenges many enterprise AI firms face in maintaining growth amid a competitive and rapidly evolving landscape. Wedbush Securities described the company's results as a "good step in the right direction," but noted that the firm must continue to demonstrate consistent execution to regain investor confidence according to its analysis.

How Markets Reacted

C3.ai's stock moved lower in premarket trading following the earnings release, with shares down 1.4% despite beating expectations for its non-GAAP earnings. The decline reflects broader concerns about the company's ability to sustain its momentum after a difficult start to the year, including a management shakeup and weaker-than-expected revenue growth as reported by Barrons.

Meta, meanwhile, saw its focus on AI remain in the spotlight after the European Commission announced an antitrust investigation into its AI-related policies for WhatsApp. The probe centers on allegations that Meta's new rules may unfairly advantage its own AI products by limiting access for third-party providers. The policy, set to take full effect in January 2026, is seen as a significant shift in how AI tools can be integrated into the messaging platform .

What Analysts Are Watching

Analysts are closely monitoring C3.ai's ability to maintain its improved performance and whether the company can achieve its long-term profitability goals. Wedbush reiterated its Outperform rating and $20 price target, noting that the firm has the right strategy in place to capitalize on the AI opportunity but must demonstrate stronger consistency according to its analysis.

In the broader AI sector, the European Commission's investigation into Meta's WhatsApp AI policy has drawn attention from both regulators and tech firms. The EU's antitrust chief, Teresa Ribera, stated that the inquiry aims to ensure that European consumers and businesses have equitable access to AI services and that dominant companies do not abuse their market power .

For C3.ai, the path forward includes a renewed focus on expanding federal and enterprise partnerships, as well as a sharper execution of its sales and marketing strategy. CEO Ehikian emphasized the company's commitment to disciplined operations during its recent earnings call, noting that sequential revenue and booking growth are positive signs of progress as reported by Seeking Alpha.

What This Means for Investors

Investors in enterprise AI firms are being urged to balance optimism with caution. While companies like C3.ai show signs of recovery, concerns over execution, competition, and market saturation persist. The company's guidance for Q3 and full-year 2026 is in line with expectations, but investors will be watching for more consistent revenue growth and a clear path to profitability as stated in its earnings report.

The broader AI landscape is also under regulatory scrutiny, particularly in Europe, where Meta's AI policies are now under investigation. The outcome of such probes could have lasting implications for how AI tools are developed and integrated into major platforms, potentially reshaping the competitive dynamics in the sector .