The European Union is yet again in the spotlight for being heavily focused on regulating artificial intelligence rather than embracing the technology. Just days after US vice president JD Vance blasted the block’s regulation antics, US tech giants have joined the fray. Tech giants led by Meta Platforms (META) and Alphabet’s Google (GOOGL) platforms are calling for a more simplified regulatory regime as one of the ways of spurring innovation around the nascent technology.
US Tech vs. EU
The two tech giants insist that the excessive regulations are holding back the block. Speaking at Techarena in Sweden, executives from the two companies aired their concerns about the block’s strict approach to regulating AI innovations. According to the executives, AI products are being delayed or watered down, given the strict regulation environment. Ultimately, the consumers suffer as they don’t enjoy breakthrough innovations available in other regions.
Only late last year did Meta start implementing AI features for its Ray-Ban Meta glasses in a few European nations. The company attributed this delay to the need to comply with Europe’s intricate regulatory framework. Unpredictable implementation was cited as a primary concern regarding its capacity to adhere to the AI Act, a historic EU law that creates a legal and regulatory framework for the technology.
The company also claimed that problems with Meta’s use of Facebook and Instagram user data to train its AI models caused the GDPR, the EU’s data privacy framework that was implemented in 2018, to delay the release of its glasses in EU nations. In an effort to soften some aspects of the AI Act, big tech companies, in general, have been increasing their lobbying efforts and using more rhetoric against the EU’s approach to tech regulation.
The new administration of President Donald Trump has also given tech giants more confidence to call for softer EU tech regulations. Calls for a more streamlined regulatory framework for tech companies doing business in Europe were not unique to Big Tech. Complex regulatory compliance burdens on their portfolio companies were also criticized by a number of venture capitalists who invest in European tech startups.
Microsoft AI Data Center Slowdown
Meanwhile, Microsoft Corp (MSFT) has started terminating leases for a significant portion of its US data centre capacity. The action might respond to worries that it is developing more AI computing than it will require in the long run. The software giant has “a couple of hundred megawatts” of capacity in cancelled leases.
Additionally, it has ceased converting agreements known as “statements of qualifications,” which typically result in formal leases. When it chose to reduce capital expenditures, competitors like Meta Platforms Inc. used that strategy in the past.
Microsoft, one of the leading Big Tech companies in AI, has retracted its expenditures and data centre construction, which raises concerns about whether the company is becoming more cautious about the demand outlook. During a late January earnings call, Chief Executive Officer Satya Nadella stated that Microsoft must continue investing in AI data centres to meet exponentially higher demand. The company has stated that it anticipates spending $80 billion on these facilities this fiscal year.
