The White House reportedly intervened to prevent Meta Platforms Inc. CEO Mark Zuckerberg and Alphabet Inc. CEO Sundar Pichai from testifying at a Senate hearing on child safety practices. Instead, the heads of Instagram and YouTube, subsidiaries of Meta and Google respectively, are set to testify at the hearing, tentatively scheduled for July 28, reported POLITICO on Wednesday. The White House has endorsed the James T. Woods Act, a legislative package designed to address online child exploitation, leading Judiciary Chair Chuck Grassley (R-Iowa) to agree to substitute the top executives for the hearing.

Grassley had previously invited the CEOs of Meta, Google, TikTok, and Snap Inc. parent Snap Inc. to testify at a hearing examining whether social media is facing its “Big Tobacco moment.” A spokesperson for Grassley stated that the senator is focused on “getting lifesaving child safety legislation actually signed into law,” rather than holding hearings primarily aimed at generating online clicks and views. White House, Meta, and Alphabet did not immediately respond to requests for comments.

Social Media Giants Under Scrutiny

This development follows Meta’s reported decision to back the Kids Online Safety Act (KOSA), a bill mandating tech firms to establish online safety measures for children, after years of opposition. The bill would preempt state AI regulations and require app stores operated by Google and Apple to implement age verification, shifting part of the responsibility for child safety from social media companies to app store platforms.

In 2025, Meta faced criticism over its AI strategy and alleged permission for chatbots to engage in inappropriate conversations with children. This prompted Sens. Josh Hawley (R-Mo.) and Marsha Blackburn (R-Tenn.) to call for an immediate investigation, increasing regulatory scrutiny and reputational pressure on the social media giant. Meanwhile, YouTube settled a lawsuit brought by a teenager who claimed he became addicted to social media, suffering sleep disruption, anxiety, and depression as a result.

Meta Platforms Inc. shares are down approximately 3% over the past week as the company faces pressure from the Donald Trump administration to submit its advanced artificial intelligence models for federal voluntary review. The stock decline is compounded by investor concerns over a significantly increased capital expenditure budget, which has risen to $135 billion for the year. The administration's push aims to allow federal agencies to evaluate the capabilities and vulnerabilities of cutting-edge AI models before broader deployment, focusing on national security risks such as cyberattacks and exploitation by foreign adversaries.

Meta remains the only major U.S. AI developer that has not yet agreed to provide the government with voluntary access to its models for testing. Administration officials have been pressing the company through email communications to participate in the voluntary government review program, the New York Times reported on Tuesday, citing four people familiar with the confidential request. In a statement, Meta spokesperson Francis Brennan said that the company supports the administration’s efforts and expects to finalize an agreement soon. Commerce Department spokesperson Ben Kass stated that the department’s Center for AI Standards and Innovation routinely works with companies on voluntary agreements as part of its mandate.

Capital Expenditure Surge

Beyond regulatory pressure, the primary factor weighing on the stock is Meta's capital expenditure trajectory. The company plans to spend $135 billion this year, up from prior guidance of $115 billion and more than double last year's $72 billion in capex. This scale of spending continues to pressure near-term multiple expansion, even as the underlying business remains strong, and remains the primary reason the stock has struggled to reclaim its highs despite strong revenue growth.

Industry Participation and Executive Order

Several leading AI companies have already entered similar arrangements with the federal government. OpenAI and Anthropic have been working with U.S. officials to evaluate unreleased AI systems. Additionally, Alphabet Inc.’s Google DeepMind, Microsoft Corp and Elon Musk’s xAI agreed in May to provide early access to future models for national security assessments. President Trump signed an executive order on June 2 giving the government responsibility for AI reviews, allowing voluntary government reviews of certain frontier AI models up to 30 days before release.

At the time of publication, Meta shares are trading 0.15% lower at $556.83.