AI is booming for social platforms – but so is regulation

As 2025’s Q4 numbers hit the headlines, social platforms seem to be thriving. Google recently announced YouTube’s revenues, totalling $60 billion (per the BBC) – surpassing Netflix’s $45 billion (a bigger difference than it seems, as YouTube doesn’t have to take bets commissioning multi-million dollar productions). TikTok finally has resolution in the US, with a new US-based company forming to oversee the data collection and algorithmic recommendations on the platform. Even Reddit is seeing positive results, reporting Q4 revenues up 70% YoY (according to Social Media Today). As a heavily relied-upon resource for LLM training, the platform has managed to monetise the value of this data directly, as well as attract new advertisers.

However, this sun-and-rainbows boom contrasts with looming storm clouds of regulatory shifts. There are seemingly two main catalysts: Australia’s decision to ban social media for under-16s; and uproar over the explicit deepfakes created by Grok.

Regulatory pressure is rising

In just the first few weeks of 2026, a new trial has started in California alleging Instagram and YouTube have created “addiction machines”, harming the mental health of children. Spain has announced its intent to ban social media for under-16s in line with Australia (according to Politico), with France, Denmark, and Portugal pursuing similar policies. The EU has warned Meta that it may be illegally blocking AI competitors on WhatsApp and pressured TikTok to change its “addictive design”. The Paris prosecutors’ cyber crime unit has raided X’s French offices over potentially illegal content creation and distribution a la the Grok scandal. Even India is seeing a growing movement to restrict children’s social media use, per the BBC.

The floodgates, it seems, have opened, and pressures are mounting for change. But what will that change look like?

A new internet

Social platforms have long kept ahead of regulatory endeavours, with elected officials famously struggling to understand how Wi-Fi works when questioning tech CEOs. In a new, uncolonized digital space, and with few fit-for-purpose rules to tie their hands, social platforms have shown massive growth across markets. They have become the de-facto way Gen Z and Millennial audiences discover, consume, and engage with just about everything – from news, to music, films, and even each other.

Yet the new, AI-fuelled wave of content proliferation on the platforms has dramatically changed how we interact with the internet. With more content comes a need for more personalisation, isolating users into filter bubbles. With more competition comes a need for creators to gamify the system, falling into extreme sensationalism and an oft-lamented artifice that has heightened the value of authenticity.

This has resulted in enough disruption that regulatory bodies have room to act. Rather than try to upend entrenched consumer habits and upset their voter bases, they can intervene at unpopular – or at least, unfamiliar – moments of change.

The more minor effect is adaptation – from slight in-platform tweaks that may not disrupt the user experience significantly (but would promote equitable market dynamics) to allowing users to step away from the doomscroll more easily. The bigger effect, however, is the potential popularity of the under-16s ban, and other restrictions for children.

A post-TikTok generation

As protections become a higher priority, a generation of children will not grow up on social media and may instead view it as something their (famously boring and uncool) parents spend too much time on. This means the ‘next big thing’ will be what they turn to instead – and games is the most likely culprit.

Roblox and Fortnite offer the same creative outlet and social bonding as Club Penguin once did, but with far more functionality and popularity. Games don’t skew as male as they used to, either: according to MIDiA’s consumer survey, nearly half of 16-19-year-old females play Roblox, nearly ten percentage points higher than males the same age. Nearly 40% play Minecraft, compared to just over half of males, and a quarter play Fortnite, compared to over a third of males. 

Open-world games where users can build things and interact with each other are a very natural space for children to gravitate. They may not stay on those exact platforms for life, but the format will likely stick. Just as millennials moved from Facebook to Instagram and TikTok, Gen Alpha may very well move from Roblox to something else, checking back in now and again for nostalgia.

This reverse demographic cliff could have a secondary impact on social platforms as well: a loss of culture. The most visibly active creators on social media all have opinions to share without fear of repercussion, and free time to create. As a result, TikTok culture has been driven by teenagers, and Facebook culture by retirees. Without young digital natives pushing on-platform narratives, can AI content really pick up the slack?

Maybe – but not a promising bet. Tomorrow’s cultural norms are created by today’s young people. If they won’t be on TikTok, then TikTok probably won’t be where it’s at.