Does anyone know what there business model could be here? Technically they could get access to all federated content, just as regular instances do. But legally they don't own that content nor do they know what country it origi ated in. This sounds like a legal nightmare to me.
Would they even be allowed to process content in any form created by EU users under GDPR?
This is exactly it. They'll dump a few billion new users on the network and then graciously offer some developer time to Mastodon, Lemmy et al since there's no way they'll currently be able to take the sort of loads we're talking about.
Might even offer to host your Fediverse instance for free, as you struggle to deal with the load caused by activity going up 1000x