Europe and the U.S. finally agree a landmark data-sharing pact — and it’s already under threat
The Privacy Shield Framework logo is displayed on a smartphone screen.
Pavlo Gonchar | Sopa Images | Lightrocket | Getty Images
Businesses can continue transferring data from the European Union to the U.S. as normal after the two superpowers this week agreed a landmark data-sharing pact.
The framework, which replaces a previous agreement that was invalidated in 2020, is a major development with implications for U.S. tech giants, which rely on the pact to transfer data on their European users back to America.
Without it in place, these companies faced the risk of costly initiatives to process and store user data locally — or withdraw their business from the bloc altogether. So the agreement of the new rules will provide some relief to Meta and other U.S. companies which share gargantuan amounts of user data around the world.
However, the rules already face the threat of legal challenges from privacy activists, who are unhappy with the level of protection the measures offer European citizens. They say it isn’t that different from an earlier framework called Privacy Shield.
CNBC runs through all you need to know about the new EU-U.S. privacy framework, why it matters, and its chances of success.
What’s the new EU-U.S. Data Privacy Framework?
The new data-sharing pact, called the EU-U.S. Data Privacy Framework, aims to ensure that data can flow safely between the EU and U.S., without having to put in place additional data protection safeguards.
In a statement Monday, EU executive body the European Commission said it concluded that U.S. data protection laws offer an “adequate level of protection” for European citizens, and introduced new safeguards limiting access to EU data by U.S. intelligence services to only what is “necessary and proportionate.”
A new Data Protection Review Court will be established for Europeans to issue privacy complaints. It will have powers to order firms to delete users’ data if it finds the information collected was in breach of the new safeguards.
Why was a new data transfer agreement needed?
The Data Privacy Framework replaces a prior agreement, called Privacy Shield, which allowed companies to share data on Europeans to the U.S. for storage and processing locally in their domestic data centers.
This was struck down in July 2020, when the European Court of Justice, the EU’s top court, sided with Austrian privacy campaigner Max Schrems, who alleged U.S. law did not offer sufficient protection against surveillance by public authorities.
Schrems said that revelations from NSA whistleblower Edward Snowden about U.S. surveillance meant that American data protection standards couldn’t be trusted.
He raised a complaint against the social network Facebook which, like many other firms, was transferring his and other user data to the States, as well as the Irish Data Protection Commission, which is Facebook’s main regulatory authority when it comes to data privacy in Europe.
It reached the European Court of Justice, which in 2015 ruled that the then Safe Harbour Agreement, a previous mechanism for allowing European users’ data to be moved to the U.S., was not valid and did not adequately protect European citizens.
It was replaced with the Privacy Shield, however, this was subsequently scrapped too.
In the meantime, companies have relied on separate mechanisms known as Standard Contractual Clauses to ensure they can still move data across the Atlantic.
These tools, too, are under threat.
The Irish DPC in May ruled that Meta’s use of SCCs for transfers of personal data to the U.S. is in breach of the EU’s General Data Protection Regulation. The U.S. tech giant was fined a record $1.3 billion.
Why does it matter?
Multinational companies operate in various jurisdictions, and they need to move data on their customers across borders in a way that’s both secure and complies with data protection regulations.
U.S. tech giants share data on their European users back home all the time. It’s part and parcel of the internet being an open, interconnected platform.
But the way data is handled by these tech companies has come under heavy scrutiny by regulators and privacy campaigners.
Meta, Google, Amazon and others collect huge amounts of data on their users, which they use to inform their content recommendation algorithms and personalize ads.
There have also been countless examples of scandals surrounding the misuse of people’s data by tech firms — not least Meta’s improper sharing of data with Cambridge Analytica, the controversial political consulting firm.
Europe has tough regulations when it comes to processing internet users’ data.
In 2018, the General Data Protection Regulation, or GDPR, came into force introducing tough requirements for organizations to ensure they handle user data safely and securely. This is a law that applies across all the countries within the EU.
The U.S., on the other hand, does not have a singular federal data protection law in place that covers the privacy of all types of data.
Instead, individual U.S. states have come up with their own respective regulations for data privacy, with California leading the charge.
“There has been intense regulatory and political scrutiny on EU-U.S. data transfers, so there are notable differences in the U.S. law protections implemented to support the new framework,” Holger Lutz, partner at law firm Clifford Chance, told CNBC via email.
“Changes to U.S. law have been made in parallel to enhance protections for EU personal data and rights for EU citizens in connection with that data. Those protections are not limited to the new framework – they also protect EU-U.S. personal data transfers outside the framework, and can be taken into account when making such transfers based on other legal instruments such as the EU standard contractual clauses.”
Will it succeed?
The approval of a new data privacy framework means that businesses will now have certainty over how they can process data across borders going forward.
Had there not been an agreement, some companies may have been forced to close their operations in Europe. Indeed, Meta warned this was a risk in February 2022.
Still, obstacles lie ahead.
Schrems, the Austrian privacy activist who helped bring down Privacy Shield, has already said he plans to launch a legal challenge to rip up the new data-sharing pact.
In a statement, Schrems said his law firm Noyb has “various options for a challenge already in the drawer.”
“We currently expect this to be back at the Court of Justice by the beginning of next year,” Schrems said.
“The Court of Justice could then even suspend the new deal while it is reviewing the substance of it. For the sake of legal certainty and the rule of law we will then get an answer if the Commission’s tiny improvements were enough or not.”
Privacy activists say the measures are not sufficient as U.S. privacy laws do not extend protections to non-U.S. citizens, meaning people in the EU don’t have the same level of protection.
“Whether the framework is successful will be a matter of whether the European courts consider the protections for personal data in the US do enough to deliver essential equivalence to the EU protections,” Lutz of Clifford Chance told CNBC.
“Businesses will be carefully considering these potential challenges in their scenario planning.”
Technology
Nvidia just spent over $900 million to hire Enfabrica CEO, license AI startup’s technology
Co-founder and chief executive officer of Nvidia Corp., Jensen Huang attends the 9th edition of the VivaTech trade show in Paris on June 11, 2025.
Chesnot | Getty Images Entertainment | Getty Images
Nvidia has just shelled out over $900 million to hire Enfabrica CEO Rochan Sankar and other employees at the artificial intelligence hardware startup, and to license the company’s technology, CNBC has learned.
In a deal reminiscent of recent AI talent acquisitions made by Meta and Google, Nvidia is paying cash and stock in the transaction, according to two people familiar with the arrangement. The deal closed last week, and Enfabrica CEO Rochan Sankar has joined Nvidia, said the people, who asked not to be named because the matter is private.
Nvidia has served as the backbone of the AI boom that began with the launch of OpenAI’s ChatGPT in late 2022. The company’s graphics processing units (GPUs), which are generally purchased in large clusters, power the training of large language models and allow for big cloud providers to offer AI services to clients.
Enfabrica, founded in 2019, says its technology can connect more than 100,000 GPUs together. It’s a solution that could help Nvidia offer integrated systems around its chips so clusters can effectively serve as a single computer.
A spokesperson for Nvidia declined to comment, and Enfabrica didn’t provide a comment for this story.
While Nvidia’s earlier AI chips like the A100 were single processors slotted into servers, its most recent products come in tall racks with 72 GPUs installed working together. That’s the kind of system inside the $4 billion data center in Wisconsin that Microsoft announced on Thursday.
Nvidia previously invested in Enfabrica as part of a $125 million Series B round in 2023 that was led by Atreides Management. The company didn’t disclose its valuation at the time, but said that it was a fivefold increase from its Series A funding.
Late last year, Enfabrica raised another $115 million from investors including Spark Capital, Arm, Samsung and Cisco. According to PitchBook, the post-money valuation was about $600 million.
Tech giants Meta, Google, Microsoft and Amazon have all poured money into hiring top AI talent through deals that resemble acquihires. The transactions allow the companies to bring in top engineers and researchers without worrying about the regulatory hassles that come with acquisitions.
The biggest such deal came in June, when Meta spent $14.3 billion on Scale AI founder Alexandr Wang and others and took a 49% stake in the AI startup. A month later, Google announced an agreement to bring in Varun Mohan, co-founder and CEO of artificial intelligence coding startup Windsurf, and other research and development employees in a $2.4 billion deal that also included licensing fees.
Last year, Google made a similar deal to bring in the founders of Character.AI. Microsoft did the same thing for Inflection, as did Amazon for Adept.
While Nvidia has been a big investor in AI technologies and infrastructure, it hasn’t been a significant acquirer. The company’s only billion-dollar-plus deal was for Israeli chip designer Mellanox, a $6.9 billion purchase announced in 2019. Much of Nvidia’s current Blackwell product lineup is enabled by networking technology that it acquired through that acquisition.
Nvidia tried to buy chip design company Arm, but that deal collapsed in 2022 due to regulatory pressure. In the past year, Nvidia closed a $700 million purchase of Run:ai, an Israeli company whose technology helps software makers optimize their infrastructure for AI.
On Thursday, Nvidia announced one of its most sizable investments to date. The chipmaker said it’s taken a $5 billion stake in Intel, and announced that the two companies will collaborate on AI processors. Nvidia also said this week that it invested close to $700 million in U.K. data center startup Nscale.
— Correction: A prior version of this story mistakenly included the name of a company as an investor in Enfabrica.
CrowdStrike logo is seen in this illustration taken July 29, 2024.
Dado Ruvic | Reuters
CrowdStrike shares popped about 13%, a day after the cybersecurity firm issued better-than-expected long-term guidance at its investor day.
The company on Wednesday said it expects net new annual recurring revenues to grow at least 20% in 2027, ahead of analysts’ expectations. CrowdStrike plans for ARR to hit $10 billion by 2031, and then double to $20 billion by 2036.
Earlier this week, the firm said it was buying AI security platform Pangea and announced a partnership with Salesforce.
“CrowdStrike is by far the most advanced security platform in the industry, and the plethora of AI-based solutions announced today will further separate CrowdStrike from the competition,” wrote Wells Fargo analyst Andrew Nowinski in a note following the event.
Some Wall Street firms also boosted their price targets.
Cybersecurity has taken center stage this year as businesses beef up security in the age of artificial intelligence. Many companies have harnessed AI tools to strengthen their offering as threats rise in sophistication.
This year’s biggest tech deals have included Google’s $32 billion acquisition of Israeli cybersecurity startup Wiz and Palo Alto Networks’ $25 billion CyberArk deal.
Cybersecurity firm Netskope hit the public market Thursday, while Thoma Bravo-backed SailPoint debuted earlier this year.
During its recent earnings report, CrowdStrike’s revenue guidance for the third quarter fell short of analysts’ expectations.
Nvidia CEO Jensen Huang attends the “Winning the AI Race” Summit in Washington D.C., U.S., July 23, 2025.
Kent Nishimura | Reuters
Nvidia CEO Jensen Huang said that the company’s $5 billion investment and technology collaboration with Intel comes after the two companies held discussions for nearly a year.
Huang said that he communicated personally with Intel CEO Lip-Bu Tan about the partnership. He called Tan a “longtime friend” on a Thursday call with reporters after the companies announced that Nvidia would co-develop data center and PC chips with Intel as part of the investment deal. On the call, Tan said he and Huang have known each other for 30 years.
“We thought it was going to be such an incredible investment,” Huang said.
Nvidia said it will collaborate with the chipmaker to create artificial intelligence systems for data centers that combine Intel’s x86-based central processors with Nvidia’s graphics processors and networking.
Intel will also sell CPUs for PCs and notebooks that integrate Nvidia graphics processors, or GPUs.
The transaction itself took a few months to come together, Intel’s revenue chief Greg Ernst wrote in a LinkedIn post, adding that the agreement was reached on Saturday.
The investment highlights how the fortunes of the two companies have switched atop Silicon Valley’s pecking order as a result of the AI explosion ushered in by OpenAI’s launch of ChatGPT in late 2022.
Intel shares are down 31.78% in the last five years, while Nvidia shares are up 1,348% as of opening prices on Thursday. Nvidia is worth over $4.25 trillion, while Intel is only worth $143 billion.
How Intel and Nvidia will collaborate
For decades, the most important part in a PC or server was the central processor, and Intel dominated the market for those chips. But AI infrastructure, like the machines in the $4 billion data center Microsoft announced on Thursday, often needs two or more Nvidia GPUs for every one CPU.
Nvidia AI systems, like the NVL72 used by Microsoft, come with Arm-based CPUs, instead of Intel x86-based CPUs. On the call, Huang said Nvidia will soon support Intel’s CPUs in its NVLink racks for AI.
“We’ll buy those CPUs from from Intel, and then we’ll connect it into super chips that then becomes our compute node, that then gets integrated into a rack scale AI supercomputer,” Huang said.
Nvidia will also contribute GPU technology to Intel chips that ship in laptops and PCs, which is an underserved market, Huang said. In total, the addressable markets for the two product collaborations are worth $50 billion, Huang said.
“We’re going to become a very large customer of Intel CPUs, and we’re going to be a large supplier of GPU chiplets into Intel” chips, he said.
Huang said the deal with Intel will have “no” impact on Nvidia’s business relationship with Arm.
Thursday’s investment deal is focused on the relationship between Nvidia and Intel’s product division, not its foundry. The two companies, however, did not rule out future foundry partnerships.
“We’ve always evaluated Intel’s foundry technology, and we’re going to continue to do it, but today, this announcement, is squarely focused on these custom CPUs,” Huang said. Nvidia currently uses Taiwan Semiconductor Manufacturing Company to manufacture its chips.
The collaboration will use Intel’s packaging, which is a part chip manufacturing that occurs toward the end of the process and combines several chip components into a single part that can be installed in machines.
Intel CEO Lip-Bu Tan makes a speech on stage in Taipei, Taiwan May 19, 2025.
Ann Wang | Reuters
Tan said he was grateful for Nvidia’s vote of confidence.
“‘I’d like to thank Jensen for the confidence in me, and our team and Intel will work really hard to make sure it’s a good return for you,” Tan said.
Last year, Intel’s board removed previous CEO Pat Gelsinger because of rising costs in its manufacturing business and the company’s failure to gain a foothold in AI chips. In March, Intel named Tan, a well-connected investor who had turned around chip software firm Cadence Design Systems, its new chief executive.
Tan has focused on cutting costs and raising money in his short tenure leading Intel even as the future of the company’s manufacturing business, called Intel Foundry, remains unclear.
In addition to the $5 billion from Nvidia and $8.9 billion from the U.S. government, Intel has taken a $2 billion investment from SoftBank, sold a majority stake in its ASIC subsidiary Altera to Silver Lake for $3.3 billion and sold $1 billion in stock from Mobileye, its self-driving car subsidiary.
Intel has also cut significant staff, saying in July that it would eliminate 15% of its workforce by the end of the year.
The company develops its own chips as well as manufacturing them. It wants to manufacture chips for companies like Nvidia or Apple, but has yet to secure them as customers. Analysts say Intel needs a big foundry client to signal that its technology is stable and ready for volume production.
But cutting-edge chip manufacturing is expensive, and Intel has signaled that if it can’t get enough customers, it may not continue investing in its foundry. That could spark a reaction from Washington, whose politicians and lobbyists consider Intel to be strategically important for the nation because it is the only American company capable of manufacturing the most advanced chips.
The Trump administration took a 10% stake in Intel in August. Intel was previously in line to receive $8.9 billion in grants and loans from the CHIPS Act, but the Trump administration asked and received an equity stake in the chipmaker in exchange for the money.
Huang was with Trump this week in England to attend a State Dinner at Windsor Palace and announce new projects and investments in the U.K. But the Trump administration wasn’t involved in this deal, according to a White House official and Huang.
“Intel’s new partnership with Nvidia is a major milestone for American high-tech manufacturing,” White House spokesman Kush Desai said in a statement.
— CNBC’s Megan Cassella contributed to this story
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