Technology

Meet the guy responsible for helping Meta, Google and Amazon prepare for new laws in Europe

Published

2 years ago

August 25, 2023

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European Union flags flutter outside the EU Commission headquarters, in Brussels, Belgium, February 1, 2023

Yves Herman | Reuters

When Gerard de Graaf moved from Europe to San Francisco almost a year ago, his job had a very different feel to it.

De Graaf, a 30-year veteran of the European Commission, was tasked with resurrecting the EU office in the Bay Area. His title is senior envoy for digital to the U.S., and since September his main job has been to help the tech industry prepare for new legislation called The Digital Services Act (DSA), which goes into effect Friday.

At the time of his arrival, the metaverse trumped artificial intelligence as the talk of the town, tech giants and emerging startups were cutting thousands of jobs, and the Nasdaq was headed for its worst year since the financial crisis in 2008.

Within de Graaf’s purview, companies including Meta, Google, Apple and Amazon have had since April to get ready for the DSA, which takes inspiration from banking regulations. They face fines of as much as 6% of annual revenue if they fail to comply with the act, which was introduced in 2020 by the EC (the executive arm of the EU) to reduce the spread of illegal content online and provide more accountability.

Coming in as an envoy, de Graaf has seen more action than he expected. In March, there was the sudden implosion of the iconic Silicon Valley Bank, the second-largest bank failure in U.S. history. At the same time, OpenAI’s ChatGPT service, launched late last year, was setting off an arms race in generative AI, with tech money pouring into new chatbots and the large language models (LLMs) powering them.

It was a “strange year in many, many ways,” de Graaf said, from his office, which is co-located with the Irish Consulate on the 23rd floor of a building in downtown San Francisco. The European Union hasn’t had a formal presence in Silicon Valley since the 1990s.

De Graaf spent much of his time meeting with top executives, policy teams and technologists at the major tech companies to discuss regulations, the impact of generative AI and competition. Although regulations are enforced by the EC in Brussels, the new outpost has been a useful way to foster a better relationship between the U.S. tech sector and the EU, de Graaf said.

“I think there’s been a conversation that we needed to have that did not really take place,” said de Graaf. With a hint of sarcasm, de Graaf said that somebody with “infinite wisdom” decided the EU should step back from the region during the internet boom, right “when Silicon Valley was taking off and going from strength to strength.”

The thinking at the time within the tech industry, he said, was that the internet is a “different technology that moves very fast” and that “policymakers don’t understand it and can’t regulate it.”

Facebook Chairman and CEO Mark Zuckerberg arrives to testify before the House Financial Services Committee on “An Examination of Facebook and Its Impact on the Financial Services and Housing Sectors” in the Rayburn House Office Building in Washington, DC on October 23, 2019.

Mandel Ngan | AFP | Getty Images

However, some major leaders in tech have shown signs that they’re taking the DSA seriously, de Graaf said. He noted that Meta CEO Mark Zuckerberg met with Thierry Breton, the EU commissioner for internal market, to go over some of the specifics of the rules, and that X owner Elon Musk has publicly supported the DSA after meeting with Breton.

De Graaf said he’s seeing “a bit more respect and understanding for the European Union’s position, and I think that has accelerated after generative AI.”

‘Serious commitment’

X, formerly known as Twitter, had withdrawn from the EU’s voluntary guidelines for countering disinformation. There was no penalty for not participating, but X must now comply with the DSA, and Breton said after his meeting with Musk that “fighting disinformation will be a legal obligation.”

“I think, in general, we’ve seen a serious commitment of big companies also in Europe and around the world to be prepared and to prepare themselves,” de Graaf said.

The new rules require platforms with at least 45 million monthly active users in the EU to provide risk assessment and mitigation plans. They also must allow for certain researchers to have inspection access to their services for harms and provide more transparency to users about their recommendation systems, even allowing people to tweak their settings.

Timing could be a challenge. As part of their cost-cutting measures implemented early this year, many companies laid off members of their trust and safety teams.

“You ask yourself the question, will these companies still have the capacity to implement these new regulations?” de Graaf said. “We’ve been assured by many of them that in the process of layoffs, they have a renewed sense of trust and safety.”

The DSA doesn’t require that tech companies maintain a certain number of trust and safety workers, de Graaf said, just that they comply with the law. Still, he said one social media platform that he declined to name gave an answer “that was not entirely reassuring” when asked how it plans to monitor for disinformation in Poland during the upcoming October elections, as the company has only one person in the region.

That’s why the rules include transparency about what exactly the platforms are doing.

“There’s a lot we don’t know, like how these companies moderate content,” de Graaf said. “And not just their resources, but also how their decisions are made with which content will stay and which content is taken down.”

AI is the next trend to watch when it comes to smartphones, says market research firm

De Graaf, a Dutchman who’s married with two kids, has spent the past three decades going deep on regulatory issues for the EC. He previously worked on the Digital Services Act and Digital Markets Act, European legislation targeted at consumer protection and rights and enhancing competition.

This isn’t his first stint in the U.S. From 1997 to 2001, he worked in Washington, D.C., as “trade counsellor at the European Commission’s Delegation to the United States,” according to his bio.

For all the talk about San Francisco’s “doom loop,” de Graaf said he sees a different level of energy in the city as well as further south in Silicon Valley.

There’s still “so much dynamism” in San Francisco, he said, adding that it’s filled with “such interesting people and objective people that I find incredibly refreshing.”

“I meet very, very interesting people here in Silicon Valley and in San Francisco,” he said. “And it’s not just the companies that are kind of avant-garde as the people behind them, so the conversations you have here with people are really rewarding.”

The generative AI boom

Generative AI was a virtually foreign concept when de Graaf arrived in San Francisco last September. Now, it’s about the only topic of conversation at tech conferences and cocktail parties.

The rise and rapid spread of generative AI has led to a number of big tech companies and high-profile executives calling for regulations, citing the technology’s potential influence on society and the economy. In June, the European Parliament cleared a major step in passing the EU AI Act, which would represent the EU’s package of AI regulations. It’s still a long way from becoming law.

De Graaf noted the irony in the industry’s attitude. Tech companies that have for years criticized the EU for overly aggressive regulations are now asking, “Why is it taking you so long?” de Graaf said.

“We will hopefully have an agreement on the text by the end of this year,” he said. “And then we always have these transitional periods where the industry needs to prepare, and we need to prepare. That might be two years or a year and a half.”

The rapidly changing landscape of generative AI makes it tricky for the EU to quickly formulate regulations.

“Six months ago, I think our big concern was to legislate the handful of companies — the extremely powerful, resource rich companies — that are going to dominate,” de Graaf said.

But as more powerful LLMs become available for people to use for free, the technology is spreading, making regulation more challenging as it’s not just about dealing with a few big companies. De Graaf has been meeting with local universities like Stanford to learn about transparency into the LLMs, how researchers can access the technology and what kind of data companies could provide to lawmakers about their software.

One proposal being floated in Europe is the idea of publicly funded AI models, so control isn’t all in the hands of big U.S. companies.

“These are questions that policymakers in the U.S. and all around the world are asking themselves,” de Graaf said. “We don’t have a crystal ball where we can just predict everything that’s happening.”

Even if there are ways to expand how AI models are developed, there’s little doubt about where the money is flowing for processing power. Nvidia, which just reported blowout earnings for the latest quarter and has seen its stock price triple in value this year, is by far the leader in providing the kind of chips needed to power generative AI systems.

“That company, they have a unique value proposition,” de Graaf said. “It’s unique not because of scale or a network effect, but because their technology is so advanced that it has no competition.”

He said that his team meets “quite regularly” with Nvidia and its policy team and they’ve been learning “how the semiconductor market is evolving.”

“That’s a useful source information for us, and of course, where the technology is going,” de Graaf said. “They know where a lot of the industries are stepping up and are on the ball or are going to move more quickly than other industries.”

WATCH: Former White House CTO Aneesh Chopra on A.I. regulation

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Technology

Figma stock pops in second day of trading after colossal debut

Published

34 mins ago

August 1, 2025

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Figma stock pops in second day of trading after colossal debut

Figma celebrates its initial public offering at the New York Stock Exchange on July 31, 2025.

NYSE

Shares of design software vendor Figma popped 6% on Friday, a day after the stock more than tripled in its New York Stock Exchange debut.

Figma opened at $85 on Thursday under the ticker FIG, and shares closed at $115.50 for a 250% gain. On Friday, the stock traded above $120.

Figma is the latest tech company to hit the public markets after an extended IPO drought. Artificial intelligence infrastructure provider CoreWeave debuted in March, followed by the digital physical therapy company Hinge Health in May.

The stablecoin issuer Circle, virtual chronic care company Omada Health and the online banking services provider Chime all went public in June.

Amazon stock sinks 7% after earnings: Here are the key takeaways

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2 hours ago

August 1, 2025

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Amazon stock sinks 7% after earnings: Here are the key takeaways

Amazon CEO Andy Jassy looks on during an Amazon Devices launch event in New York City, U.S., February 26, 2025. REUTERS/Brendan McDermid

Brendan Mcdermid | Reuters

Amazon on Thursday reported second-quarter earnings that beat expectations on most metrics, but the results weren’t good enough to please Wall Street.

Amazon stock slid following the release and throughout the conference call. Shares were down about 7% Friday.

Profit guidance was weaker than expected, while cloud growth underwhelmed investors.

That overshadowed an otherwise upbeat report that included strong revenue and profits, steady retail growth and a 23% increase in advertising sales. Amazon also offered a rosy revenue forecast for the current quarter.

Here are three key takeaways from Amazon’s earnings:

AI spending boost

Amazon reported that it spent $31.4 billion on capital expenses in the last quarter, and the company expects that to be “reasonably representative” of its spending in the second half of the year. In the first quarter, Amazon’s capital expenditures exceeded $24 billion.

Taken together, it means that Amazon could spend an upwards of $118 billion on capital expenditures this year, up from its previous forecast of $100 billion. Amazon’s capex, which hit $83 billion a year ago, is primarily going toward building out tech infrastructure to support artificial intelligence demand.

Amazon’s competitors are also throwing big money at AI.

On Wednesday, Meta lifted its forecast for capital spending to a range of $66 billion to $72 billion. Google parent Alphabet raised its capital spend last week to $85 billion this year.

The question on investors’ minds is when these big AI bets will begin to pay off in revenue or profit.

Amazon boosts capex to more than $118 billion as AI cloud arms race heats up

Amazon CEO Andy Jassy hinted the company’s progress on AI has improved its “operational efficiency and business growth,” but offered few specifics beyond that.

Amazon has also said previously that generative AI is contributing revenue to AWS at an annualized rate equivalent to “multiple billions of dollars.”

On a conference call with investors, Jassy pointed to Alexa+, an upgraded version of its digital assistant, as a way it could monetize AI. The service, which launched in early access in late March, is $19.99 a month, or free for Prime members.

“I think over time, you could also imagine, as we keep adding functionality that there could be some sort of subscription element beyond what there is today,” Jassy said.

Jassy reiterated that it’s “very early days” in AI development and adoption.

Cloud rivals

Amazon Web Services continues to lead the cloud infrastructure market, but it’s facing steeper competition from Microsoft Azure and Google Cloud, which posted stronger growth rates in their latest quarterly results.

AWS grew its revenue by 18% year over year, which just beat Wall Street’s estimates. That trailed the big gains reported by Microsoft and Alphabet. The companies recorded cloud growth rates of 39% and 32%, respectively.

Analysts asked Amazon leadership on the call why its cloud business isn’t growing as quickly as its rivals.

“There is a Wall Street finance person narrative right now that AWS is falling behind in generative AI with concerns about share loss to peers, etcetera,” said Morgan Stanley analyst Brian Nowak. The firm has an overweight rating on Amazon’s stock.

Attendees walk through an exposition hall at AWS re:Invent, a conference hosted by Amazon Web Services, in Las Vegas on Dec. 3, 2024.

Noah Berger | Getty Images

JPMorgan analyst Doug Anmuth said there’s been “significantly faster cloud growth among the number two and number three players in the space.”

Jassy said sometimes the company is growing faster than rivals, and vice versa, but AWS still has a “meaningfully larger” cloud business.

“I think the second player is about 65% of the size of AWS,” he said.

Jassy also appeared to take a swipe at Microsoft over a recent worldwide attack on its SharePoint collaboration software, saying AWS customers see a “very big difference” in security.

“You could just look at what’s happened the last couple months, you can just see kind of adventures at some of these players almost every month,” Jassy said.

The comments failed to sway some investors.

Bernstein analysts said Friday that the “tone wasn’t great” and Amazon’s explanation for its competitive positioning and trajectory “sounded less constructive than peers.”

“Words matter…but numbers matter more,” the analysts wrote.

Tariff risk better than feared

In May, Amazon warned it was bracing for potential uncertainty ahead linked to President Donald Trump‘s shifting tariff and trade policies.

At the time, products imported from China were subject to a steep 145% levy. That threatened to drive up costs for Amazon vendors and its millions of third-party sellers, raising concerns of price increases and a drop-off in consumer demand.

Since then, the U.S. and China have reached a truce, with China now facing a 30% combined tariff rate.

Amazon’s latest earnings showed the company seems to be navigating the tariffs and shifting trade policies better than Wall Street had feared.

Sales in its online store topped analysts projections and grew 11% year over year, while seller services revenue also beat expectations. The number of items sold in Amazon’s online and physical stores jumped 12%, indicating that the consumer remains “healthy” despite tariffs and economic uncertainty, analysts at Citizens wrote in a Friday note to clients.

Amazon’s third-quarter sales forecast, which implies 13% growth at the high end, suggests “tariffs appear to have been effectively absorbed by suppliers, merchants and customers,” Citizens analysts wrote. They have an outperform rating on the company’s shares.

Jassy struck a positive but cautious tone on the call, saying it’s “hard to know” where the tariffs will settle, especially when it comes to China.

“We’re unsure at this point who’s going to end up absorbing those higher costs,” he said.

A deal between the U.S. and China hasn’t been finalized, and the two countries have until Aug. 12 to reach a final agreement.

So far, Amazon has been able to weather Trump’s trade war.

“We just haven’t seen diminished demand, and we haven’t seen any kind of broad scale [average selling price] increases,” Jassy said on the call. “So that could change in H2. There are a lot of things that we don’t know, but that’s what we’ve seen so far.”

Joby, L3Harris partner on hybrid defense craft that can be piloted or autonomous

Published

2 hours ago

August 1, 2025

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Joby, L3Harris partner on hybrid defense craft that can be piloted or autonomous

An electric air taxi by Joby Aviation sits at the Downtown Manhattan Heliport in New York City, Nov. 12, 2023.

Roselle Chen | Reuters

Joby Aviation and defense manufacturing giant L3Harris announced a partnership Friday to develop a next-generation military craft that can be piloted or fly autonomously.

The partnership brings together Joby’s hybrid vertical take-off and landing, or VTOL, aircraft and L3’s expertise in military systems and certification.

The companies expect to begin testing this fall, followed by operational demonstrations in 2026, according to the release.

“Conflicts like Russia, Ukraine, are really changing how people think about, you know, low altitude aviation generally,” Joby executive chairman Paul Sciarra told CNBC’s Morgan Brennan. “Getting something out there that can move very quickly from demonstration to deployability felt especially important.”

Jon Rambeau, president of Integrated Mission Systems at L3Harris, said initially the project will focus on use cases like airborne surveillance, reconnaissance and contested logistics applications.

“We’re going to target … the broader government exercises that the military services hold periodically, and see if we can fit some of those use cases into those larger exercises,” Rambeau told Brennan.