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Why Mark Zuckerberg’s AI talent spending spree is no guarantee that Meta will catch up to rivals

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In the last week alone, Meta has poached more than a dozen top AI researchers from peer companies, giving each one immediate cash bonuses worth up to $100 million in a frantic effort to keep up with the AI arms race after falling behind market leaders such as OpenAI and Anthropic.

But perhaps Meta CEO Mark Zuckerberg should have remembered the timeless refrain from the classic 1960s hit Beatles song that money “can’t buy me love”—or, in this case, buy performance.

Many remember the implosion of Michael Eisner at Disney soon after losing $140 million hiring super-agent Michael Ovitz, who left in failure soon after joining. Similarly, Yahoo stole the celebrated Google star Henrique de Castro for about $60 million, but he washed out just after his first year in 2014.

There are many examples across sectors and across history which show that throwing up boatloads of money to poach top talent from competitors is never enough on its own. From sports to invention to investment management—and even our own field, academia—the road to decline is littered with cautionary tales of misplaced confidence from throwing money at top talent unsuccessfully. Greatness, it turns out, is harder to buy than it looks, and unless Zuckerberg can stem the underlying drivers of AI and innovation stagnation at Meta, then his recent hiring spree may only turn into another cautionary tale.

Fanfare to failure—messianic misfires

One reason poaching top talent from rivals frequently ends poorly is because oftentimes these firms are getting top talent after they have already hit their peak. Nowhere is this challenge more evident than in the world of sports, where most athletes peak young and deteriorate with age and injuries.

In the 1980s, New York Yankees owner George Steinbrenner became infamous for showering lavish megadeals on aging stars more famous for their decorated pasts than their current performance or future potential. As Steinbrenner established record after record for the largest contracts ever doled out, the Yankees languished in mediocrity as these aging stars turned into injury-plagued busts.

Their egos hurt, many of these frustrated, self-indulgent stars lashed out, turning the Yankees into a laughingstock of infighting, dysfunction, and needless drama amidst a championship drought of more than a decade. Ironically, it was only after Steinbrenner was suspended—after he tried to pay a gambler to dig up dirt on an aging star to get out of a particularly onerous bad contract—and after had-beens finally got out of the way of younger stars on the ascent that the Yankees finally rebounded.

That phenomenon of early-career productivity followed by late-career stagnation and decline is prevalent beyond sports. In academia, numerous studies have shown that university faculty and researchers, in fields ranging from the sciences to mathematics, publish most prolifically early in their careers, and that their research output declines dramatically after they achieve tenure. Similarly, Ivy League schools are often accused of trophy hiring, bringing in Nobel Prize winners and other high-profile scholars after they have already reached the peak of their intellectual contributions.

Messiahs brought in from the outside to rescue flailing enterprises rarely live up to expectations. Consider the case of Ray Ozzie, the widely admired software visionary who created groundbreaking software such as Lotus Notes and Groove. Ozzie was brought in by Bill Gates to rescue Microsoft in the early 2000s, but despite Ozzie’s peerless pedigree, he quickly flamed out at the company as he was unable to recreate his early-career magic and failed to develop much in the way of new software.

Correspondence between pay and performance

It’s not just about late-career decline. From the outset, the correspondence between pay and performance is less clear than one would expect—and sometimes even resembles a negative correlation.

In the business world, numerous studies have found that higher CEO pay has little impact on the long-term stock performance of companies. In fact, according to MSCI, average shareholder returns tend to be significantly higher when a company’s CEO is in the bottom 20% of pay, while share returns tend to be lower when a company’s CEO is in the top 20% of earners.

Indeed, revered CEOs such as Warren Buffett, Jensen Huang, and Jeff Bezos have been notorious for drawing comparatively low cash salaries despite extremely strong performance, similar to legendary founders such as Jim Sinegal of Costco, Bernie Marcus of Home Depot, and Jim Casey of UPS, who took their compensation largely in stock. On the other hand, far more controversial CEOs such as Adam Neumann at WeWork and Dennis Kozlowski at Tyco made out lavishly, misappropriating funds from their corporate treasuries while steering their companies into the ground.

Similarly, in our prior research on the historical investment underperformance of Connecticut’s public pension funds relative to all 50 state pension funds, we found that the more a state’s chief investment officer is paid, the worse their performance. 

Innovative geniuses often go unrewarded financially

In Meta’s case, it’s clear that Zuckerberg is counting on his spending spree to fuel AI innovation as Meta falls behind its peers. This ignores a fundamental problem of innovation and inventiveness, which is that many of the innovative geniuses who devised transformative inventions failed to profit financially from their own ingenuity while more aggressive, entrepreneurial bystanders claimed credit and profit.

These examples include Tim Berners-Lee, who never earned a penny from the creation of the World Wide Web; Eli Whitney, who fared similarly from his invention of the cotton gin; Martin Cooper, the Motorola engineer who was the father of the modern handheld cellphone yet never profited from it; Robert Kearns, who invented the intermittent windshield wiper but was stuck in litigation for the rest of his life against the automakers to protect his patent; and Spencer Silver, a 3M engineer whose creation, the Post-it note, was requisitioned by colleagues who claimed credit for his invention.

Such inventive introverts transformed the world with inventions undergirding the industrial and technological revolutions, yet they were either unwilling or unable to play the game, falling prey to more aggressive and entrepreneurial personalities around them who commandeered the lucrative financial rewards.

Skating to where the puck is, not where the puck is going

If there were ever telltale signs of when the top of a bubble frenzy could be near, it would be the following: First, when every taxi driver and hairdresser is talking about it and diving in; second, when all the business school students are trying to get related jobs; and third, when firms are dishing out eye-popping cash bonuses to poach talent from competitors.

That is exactly what happened with Wall Street’s arms race for mortgage traders in the lead-up to the Great Financial Crisis, which offers some striking lessons for Meta. The then-CEO of Merrill Lynch, Stan O’Neal, offered cash bonuses of about $50 million to poach elite mortgage traders from competitors such as Credit Suisse and Bear Stearns, and authorized those mercenaries to take tremendous risks with little oversight. These traders then built a massive mortgage portfolio which quickly blew up when the 2008 crisis hit, with Merrill losing billions practically overnight and forced into a fire-sale merger with Bank of America.

In Meta’s case, poaching top AI engineers could represent a similar case of skating to where the puck is, not where the puck is going, as the rapid pace of innovation in AI has led to many of genuinely new AI breakthroughs coming from startups and upstart disruptors rather than entrenched incumbents. Furthermore, many engineers claim the advent of AI has resulted in coding becoming increasingly commoditized, turning some software developers into interchangeable parts.

Reliance on stars vs. cultures of inspiration

Already, leading voices within Meta are warning that Meta’s AI woes run much deeper, with a top AI researcher warning just this week of the “metastatic cancer” afflicting Meta’s AI development amidst a “culture of fear” and inept leadership.

This year’s Super Bowl offers a potent reminder of the pitfalls of relying on stars versus the potential for cultures of inspiration to propel underdogs toward unexpected heights. The odds favored the Kansas City Chiefs, with recognizable superstars such as Patrick Mahomes and Travis Kelce, but they fell to a dominant Philadelphia Eagles boasting a cohesive unit of ascendant stars who perhaps lacked the grandiosity and individual stature of any number of Chiefs players.

For Mark Zuckerberg, the Super Bowl is a potent reminder that money can buy lots of things—but it can’t buy everything.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.



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Senate Dems’ plan to fix Obamacare premiums adds nearly $300 billion to deficit, CRFB says

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December 5, 2025

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The Committee for a Responsible Federal Budget (CRFB) is a nonpartisan watchdog that regularly estimates how much the U.S. Congress is adding to the $38 trillion national debt.

With enhanced Affordable Care Act (ACA) subsidies due to expire within days, some Senate Democrats are scrambling to protect millions of Americans from getting the unpleasant holiday gift of spiking health insurance premiums. The CRFB says there’s just one problem with the plan: It’s not funded.

“With the national debt as large as the economy and interest payments costing $1 trillion annually, it is absurd to suggest adding hundreds of billions more to the debt,” CRFB President Maya MacGuineas wrote in a statement on Friday afternoon.

The proposal, backed by members of the Senate Democratic caucus, would fully extend the enhanced ACA subsidies for three years, from 2026 through 2028, with no additional income limits on who can qualify. Those subsidies, originally boosted during the pandemic and later renewed, were designed to lower premiums and prevent coverage losses for middle‑ and lower‑income households purchasing insurance on the ACA exchanges.

CRFB estimated that even this three‑year extension alone would add roughly $300 billion to federal deficits over the next decade, largely because the federal government would continue to shoulder a larger share of premium costs while enrollment and subsidy amounts remain elevated. If Congress ultimately moves to make the enhanced subsidies permanent—as many advocates have urged—the total cost could swell to nearly $550 billion in additional borrowing over the next decade.

Reversing recent guardrails

MacGuineas called the Senate bill “far worse than even a debt-financed extension” as it would roll back several “program integrity” measures that were enacted as part of a 2025 reconciliation law and were intended to tighten oversight of ACA subsidies. On top of that, it would be funded by borrowing even more. “This is a bad idea made worse,” MacGuineas added.

The watchdog group’s central critique is that the new Senate plan does not attempt to offset its costs through spending cuts or new revenue and, in their view, goes beyond a simple extension by expanding the underlying subsidy structure.

The legislation would permanently repeal restrictions that eliminated subsidies for certain groups enrolling during special enrollment periods and would scrap rules requiring full repayment of excess advance subsidies and stricter verification of eligibility and tax reconciliation. The bill would also nullify portions of a 2025 federal regulation that loosened limits on the actuarial value of exchange plans and altered how subsidies are calculated, effectively reshaping how generous plans can be and how federal support is determined. CRFB warned these reversals would increase costs further while weakening safeguards designed to reduce misuse and error in the subsidy system.

MacGuineas said that any subsidy extension should be paired with broader reforms to curb health spending and reduce overall borrowing. In her view, lawmakers are missing a chance to redesign ACA support in a way that lowers premiums while also improving the long‑term budget outlook.

The debate over ACA subsidies recently contributed to a government funding standoff, and CRFB argued that the new Senate bill reflects a political compromise that prioritizes short‑term relief over long‑term fiscal responsibility.

“After a pointless government shutdown over this issue, it is beyond disappointing that this is the preferred solution to such an important issue,” MacGuineas wrote.

The off-year elections cast the government shutdown and cost-of-living arguments in a different light. Democrats made stunning gains and almost flipped a deep-red district in Tennessee as politicians from the far left and center coalesced around “affordability.”

Senate Minority Leader Chuck Schumer is reportedly smelling blood in the water and doubling down on the theme heading into the pivotal midterm elections of 2026. President Donald Trump is scheduled to visit Pennsylvania soon to discuss pocketbook anxieties. But he is repeating predecessor Joe Biden’s habit of dismissing inflation, despite widespread evidence to the contrary.

“We fixed inflation, and we fixed almost everything,” Trump said in a Tuesday cabinet meeting, in which he also dismissed affordability as a “hoax” pushed by Democrats.​

Lawmakers on both sides of the aisle now face a politically fraught choice: allow premiums to jump sharply—including in swing states like Pennsylvania where ACA enrollees face double‑digit increases—or pass an expensive subsidy extension that would, as CRFB calculates, explode the deficit without addressing underlying health care costs.



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Netflix–Warner Bros. deal sets up $72 billion antitrust test

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December 5, 2025

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Netflix Inc. has won the heated takeover battle for Warner Bros. Discovery Inc. Now it must convince global antitrust regulators that the deal won’t give it an illegal advantage in the streaming market. 

The $72 billion tie-up joins the world’s dominant paid streaming service with one of Hollywood’s most iconic movie studios. It would reshape the market for online video content by combining the No. 1 streaming player with the No. 4 service HBO Max and its blockbuster hits such as Game Of Thrones, Friends, and the DC Universe comics characters franchise.  

That could raise red flags for global antitrust regulators over concerns that Netflix would have too much control over the streaming market. The company faces a lengthy Justice Department review and a possible US lawsuit seeking to block the deal if it doesn’t adopt some remedies to get it cleared, analysts said.

“Netflix will have an uphill climb unless it agrees to divest HBO Max as well as additional behavioral commitments — particularly on licensing content,” said Bloomberg Intelligence analyst Jennifer Rie. “The streaming overlap is significant,” she added, saying the argument that “the market should be viewed more broadly is a tough one to win.”

By choosing Netflix, Warner Bros. has jilted another bidder, Paramount Skydance Corp., a move that risks touching off a political battle in Washington. Paramount is backed by the world’s second-richest man, Larry Ellison, and his son, David Ellison, and the company has touted their longstanding close ties to President Donald Trump. Their acquisition of Paramount, which closed in August, has won public praise from Trump. 

Comcast Corp. also made a bid for Warner Bros., looking to merge it with its NBCUniversal division.

The Justice Department’s antitrust division, which would review the transaction in the US, could argue that the deal is illegal on its face because the combined market share would put Netflix well over a 30% threshold.

The White House, the Justice Department and Comcast didn’t immediately respond to requests for comment. 

US lawmakers from both parties, including Republican Representative Darrell Issa and Democratic Senator Elizabeth Warren have already faulted the transaction — which would create a global streaming giant with 450 million users — as harmful to consumers.

“This deal looks like an anti-monopoly nightmare,” Warren said after the Netflix announcement. Utah Senator Mike Lee, a Republican, said in a social media post earlier this week that a Warner Bros.-Netflix tie-up would raise more serious competition questions “than any transaction I’ve seen in about a decade.”

European Union regulators are also likely to subject the Netflix proposal to an intensive review amid pressure from legislators. In the UK, the deal has already drawn scrutiny before the announcement, with House of Lords member Baroness Luciana Berger pressing the government on how the transaction would impact competition and consumer prices.

The combined company could raise prices and broadly impact “culture, film, cinemas and theater releases,”said Andreas Schwab, a leading member of the European Parliament on competition issues, after the announcement.

Paramount has sought to frame the Netflix deal as a non-starter. “The simple truth is that a deal with Netflix as the buyer likely will never close, due to antitrust and regulatory challenges in the United States and in most jurisdictions abroad,” Paramount’s antitrust lawyers wrote to their counterparts at Warner Bros. on Dec. 1.

Appealing directly to Trump could help Netflix avoid intense antitrust scrutiny, New Street Research’s Blair Levin wrote in a note on Friday. Levin said it’s possible that Trump could come to see the benefit of switching from a pro-Paramount position to a pro-Netflix position. “And if he does so, we believe the DOJ will follow suit,” Levin wrote.

Netflix co-Chief Executive Officer Ted Sarandos had dinner with Trump at the president’s Mar-a-Lago resort in Florida last December, a move other CEOs made after the election in order to win over the administration. In a call with investors Friday morning, Sarandos said that he’s “highly confident in the regulatory process,” contending the deal favors consumers, workers and innovation. 

“Our plans here are to work really closely with all the appropriate governments and regulators, but really confident that we’re going to get all the necessary approvals that we need,” he said.

Netflix will likely argue to regulators that other video services such as Google’s YouTube and ByteDance Ltd.’s TikTok should be included in any analysis of the market, which would dramatically shrink the company’s perceived dominance.

The US Federal Communications Commission, which regulates the transfer of broadcast-TV licenses, isn’t expected to play a role in the deal, as neither hold such licenses. Warner Bros. plans to spin off its cable TV division, which includes channels such as CNN, TBS and TNT, before the sale.

Even if antitrust reviews just focus on streaming, Netflix believes it will ultimately prevail, pointing to Amazon.com Inc.’s Prime and Walt Disney Co. as other major competitors, according to people familiar with the company’s thinking. 

Netflix is expected to argue that more than 75% of HBO Max subscribers already subscribe to Netflix, making them complementary offerings rather than competitors, said the people, who asked not to be named discussing confidential deliberations. The company is expected to make the case that reducing its content costs through owning Warner Bros., eliminating redundant back-end technology and bundling Netflix with Max will yield lower prices.



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The rise of AI reasoning models comes with a big energy tradeoff

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December 5, 2025

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Nearly all leading artificial intelligence developers are focused on building AI models that mimic the way humans reason, but new research shows these cutting-edge systems can be far more energy intensive, adding to concerns about AI’s strain on power grids.

AI reasoning models used 30 times more power on average to respond to 1,000 written prompts than alternatives without this reasoning capability or which had it disabled, according to a study released Thursday. The work was carried out by the AI Energy Score project, led by Hugging Face research scientist Sasha Luccioni and Salesforce Inc. head of AI sustainability Boris Gamazaychikov.

The researchers evaluated 40 open, freely available AI models, including software from OpenAI, Alphabet Inc.’s Google and Microsoft Corp. Some models were found to have a much wider disparity in energy consumption, including one from Chinese upstart DeepSeek. A slimmed-down version of DeepSeek’s R1 model used just 50 watt hours to respond to the prompts when reasoning was turned off, or about as much power as is needed to run a 50 watt lightbulb for an hour. With the reasoning feature enabled, the same model required 7,626 watt hours to complete the tasks.

The soaring energy needs of AI have increasingly come under scrutiny. As tech companies race to build more and bigger data centers to support AI, industry watchers have raised concerns about straining power grids and raising energy costs for consumers. A Bloomberg investigation in September found that wholesale electricity prices rose as much as 267% over the past five years in areas near data centers. There are also environmental drawbacks, as Microsoft, Google and Amazon.com Inc. have previously acknowledged the data center buildout could complicate their long-term climate objectives. 

More than a year ago, OpenAI released its first reasoning model, called o1. Where its prior software replied almost instantly to queries, o1 spent more time computing an answer before responding. Many other AI companies have since released similar systems, with the goal of solving more complex multistep problems for fields like science, math and coding.

Though reasoning systems have quickly become the industry norm for carrying out more complicated tasks, there has been little research into their energy demands. Much of the increase in power consumption is due to reasoning models generating much more text when responding, the researchers said. 

The new report aims to better understand how AI energy needs are evolving, Luccioni said. She also hopes it helps people better understand that there are different types of AI models suited to different actions. Not every query requires tapping the most computationally intensive AI reasoning systems.

“We should be smarter about the way that we use AI,” Luccioni said. “Choosing the right model for the right task is important.”

To test the difference in power use, the researchers ran all the models on the same computer hardware. They used the same prompts for each, ranging from simple questions — such as asking which team won the Super Bowl in a particular year — to more complex math problems. They also used a software tool called CodeCarbon to track how much energy was being consumed in real time.

The results varied considerably. The researchers found one of Microsoft’s Phi 4 reasoning models used 9,462 watt hours with reasoning turned on, compared with about 18 watt hours with it off. OpenAI’s largest gpt-oss model, meanwhile, had a less stark difference. It used 8,504 watt hours with reasoning on the most computationally intensive “high” setting and 5,313 watt hours with the setting turned down to “low.” 

OpenAI, Microsoft, Google and DeepSeek did not immediately respond to a request for comment.

Google released internal research in August that estimated the median text prompt for its Gemini AI service used 0.24 watt-hours of energy, roughly equal to watching TV for less than nine seconds. Google said that figure was “substantially lower than many public estimates.” 

Much of the discussion about AI power consumption has focused on large-scale facilities set up to train artificial intelligence systems. Increasingly, however, tech firms are shifting more resources to inference, or the process of running AI systems after they’ve been trained. The push toward reasoning models is a big piece of that as these systems are more reliant on inference.

Recently, some tech leaders have acknowledged that AI’s power draw needs to be reckoned with. Microsoft CEO Satya Nadella said the industry must earn the “social permission to consume energy” for AI data centers in a November interview. To do that, he argued tech must use AI to do good and foster broad economic growth.



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