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Dado Ruvic | Reuters

STOCKHOLM — Executives at U.S. tech giants Google and Meta said that Europe’s artificial intelligence industry is being held back by excessive regulation, adding to rhetoric from Donald Trump’s administration that the region’s strict tech rules are choking innovation.

Speaking at the Techarena tech conference in Stockholm, Sweden, public policy chiefs at both Google and Meta used the stage as a platform to voice their concerns about the bloc’s strict approach to regulating technologies such as AI and machine learning.

“I think there is now broad consensus that European regulation around technology has its issues, and sometimes it’s too fragmented, like GDPR [General Data Protection Regulation], sometimes it goes too far, like the AI Act,” Chris Yiu, Meta’s director of public policy, told an audience of tech founders and investors at Techarena on Thursday.

“But the net result of all of that is that products get delayed or get watered down and European citizens and consumers suffer,” he said.

Yiu pulled out a pair of Meta’s recently launched Ray-Ban branded glasses, which use AI to translate speech from one language to another or describe images for the visually impaired.

“This is a profound and very human application of the technology, and it is slow to arrive in Europe because of the issues that we have around regulation,” Yiu said.

Meta only began rolling out AI features for its Ray-Ban Meta glasses in some European countries in November, after a delay the firm claimed was caused by the need to reach compliance with Europe’s “complex regulatory system.”

Meta previously expressed concerns about its ability to comply with the AI Act, a landmark EU law that establishes a legal and regulatory framework for the technology, flagging “unpredictable” implementation was a core issue.

The firm also said that GDPR — the EU’s data privacy framework introduced in 2018 — held up the launch of its glasses in EU countries due to issues surrounding Meta’s use of Instagram and Facebook user data to train its AI models.

Dorothy Chou, Google DeepMind’s head of public policy, said a key problem with Europe’s approach to regulating artificial intelligence technology was that the the AI Act was devised before ChatGPT had even come out.

The AI Act was first introduced by the European Commission, the EU’s executive body, in April 2021. OpenAI launched ChatGPT in November 2022.

“There is a way to use policy to create a better investment environment when it’s done in a way that promotes business” Chou said, referring to the U.S. Inflation Reduction Act as an example of policy that has led to benefits, like subsidies for electric vehicles.

“I think what’s difficult is when you are regulating on a time scale that doesn’t match the technology,” Chou added. “I think what we need to do is both regulate to ensure that there is responsible application of technology, while also ensuring that the industry is thriving it all the right ways.”

Big Tech ups the ante

Big Tech firms more generally have been upping their rhetoric against the EU’s approach to tech regulation and ramping up lobbying efforts in an attempt to soften aspects of the AI Act.

Kent Walker, Google’s president of global affairs, told Politico last month that the EU’s code of practice for general-purpose AI (GPAI) models — which refers to systems like OpenAI’s GPT family of large language models, or LLMs — was a “step in the wrong direction.”

The EU AI Office, a newly created body overseeing models under the AI Act, published a second-draft code of practice for GPAI systems in December.

Earlier this month, Meta’s newly appointed Chief Global Affairs Officer Joel Kaplan suggested in a live-streamed interview at an event in Brussels that the tech giant would not sign up to the code in its current form.

The rules, he said, go “beyond the requirements” of the AI Act and impose “unworkable and technically unfeasible requirements.”

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Tech giants’ pleas for softer EU tech regulation have been emboldened of late by President Donald Trump’s new administration.

At the international AI Action Summit in Paris last week, U.S. Vice President JD Vance blasted Europe for being too heavily focused on regulating artificial intelligence rather than embracing the technology’s growth potential.

Harmonizing EU rules for startups

Big Tech weren’t alone in calling for a more simplified regulatory regime for technology firms operating in Europe.

Several venture capitalists investing in European tech startups also decried complex regulatory compliance burdens on their portfolio companies.

Antoine Moyroud, a partner at Lightspeed Venture Partners, said that whereas the U.S. has been pushing forward initiatives such as the $500 billion Stargate investment project that strike a “hopeful” message around AI,” Europe’s narrative tends to be more “dramatic.”

The region needs to start thinking “beyond GDPR, beyond the EU AI Act” and producing technological success stories to get people “excited” about the promise of the technology.

Lightspeed are investors in French AI unicorn Mistral, which is often touted as Europe’s key competitor to OpenAI.

Last year, tech entrepreneurs in the region proposed a new initiative to address fragmented market regulations across the 27-member bloc by establishing a so-called “28th regime.” These proposed legal frameworks within the EU offer firms an alternative to member states’ own national rules, rather than replacing them.

For example, there’s a European Company Statute under the 28th regime that makes it simpler to set up public limited liability companies in the EU.

The likes of Stripe CEO Patrick Collison and Wise co-founder Taavet Hinrikus are among the startup founders looking to set up a new entity under the 28th regime, called “EU Inc.”

“Europe is a fragmented place, and what you want to do is [to] be able to hire across any country,” Luke Pappas, a London-based partner for venture capital firm NEA, told CNBC in an interview on the sidelines of Techarena.

A key issue with attracting talent in this way, according to Pappas, is that currently “the process of giving equity cross border in Europe is not very easy.”

“If we can standardize equity, for example, that will dramatically help,” he added.

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Meta’s big AI spending blitz will continue into 2026

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Meta's big AI spending blitz will continue into 2026

Meta CEO Mark Zuckerberg makes a keynote speech at the Meta Connect annual event, at the company’s headquarters in Menlo Park, California, U.S. September 25, 2024.

Manuel Orbegozo | Reuters

Meta CEO Mark Zuckerberg plans to continue his company’s artificial intelligence spending blitz well into the next year as rival tech giants do the same.

Zuckerberg told analysts Wednesday during a second-quarter earnings call that AI’s rapid pace of progress has informed much of Meta’s recent business decisions, including the company’s $14.3 billion June investment into the data-annotating startup Scale AI as part of a revamped AI strategy involving a wave of high-profile hires.

AI’s swift advancement warrants that Meta have “the absolute best and most elite talent-dense team” that can access the resources they need from a “leading compute fleet,” Zuckerberg said about the AI Superintelligence team he assembled for his company this summer. Whatever these top-tier AI researchers build can then be implemented throughout Facebook, Instagram and the rest of the company’s family of apps, he said.

“When we take a technology, we’re good at driving that through all of our apps and our ad systems,” Zuckerberg said. “There’s no other company that is as good as us at kind of taking something and getting it in front of billions of people.”

Those AI endeavors, however, come at a cost.

Meta on Wednesday said it expects its total expenses for 2025 to come in the range of $114 billion and $118 billion, raising the low end of its previous outlook of between $113 billion and $118 billion. And while Meta is still planning out next year, the company said its AI initiatives will “result in a 2026 year-over-year expense growth rate that is above the 2025 expense growth.”

Other tech giants are also spending heavy on AI projects and talent.

Alphabet said last week during its earnings report that it is raising its 2025 capital expenditures forecast to $85 billion, which is $10 billion higher from its prior forecast. Microsoft said Wednesday that its fiscal first-quarter capital expenditures will be $30 billion, ahead of analyst expectations of $24.23 billion.

For now, investors are OK with Meta’s big AI investments, with the company’s shares up nearly 12% in after-hour trading on Wednesday. It helps that Meta reported strong second-quarter earnings that beat on the top and bottom while providing third-quarter sales guidance that topped Wall Street expectations.

It also helps that Zuckerberg said AI drove “greater efficiency and gains across our ad system,” likely reassuring worried investors that Meta’s big AI spending is leading to some immediate results.

And while the company’s Reality Labs unit continues bleeding money, posting an operating loss of $4.53 billion in the second quarter, the surprise hit of the Ray-Ban Meta smart glasses seems to have quelled investor discontent for the time being.

“I continue to think that glasses are basically going to be the ideal form factor for AI, because you can let an AI see what you see throughout the day, hear what you hear, talk to you,” Zuckerberg said. “Once you get a display in there, whether it’s the kind of wide holographic field of view, like we showed with Orion, or just a smaller display that might be good for displaying some information, that’s going to unlock a lot of value, where you can just interact with an AI system throughout the day.”

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Elon Musk’s plan to build Boring Co. tunnels in Nashville sparks partisan feud

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Elon Musk's plan to build Boring Co. tunnels in Nashville sparks partisan feud

Elon Musk has expanded a number of his companies within Texas, including Tesla, SpaceX, the Boring Co. and Neuralink. Tesla broke ground on a lithium refinery in Texas earlier this year with Governor Greg Abbott in attendance.

Christophe Gateau | Picture Alliance | Getty Images

Elon Musk’s tunneling venture, The Boring Company, announced plans earlier this week to build a 10-mile underground loop in Nashville, in coordination with Tennessee Republican Governor Bill Lee, who put out a press release praising the project.

Democratic lawmakers in Nashville are demanding answers on the plans, while the state’s Republican leaders have jumped at the chance to partner with Musk. A state commission is holding an emergency meeting and public hearing Thursday morning to discuss a “no cost/mutual benefit” lease arrangement that’s been proposed to help the company get the tunnels started.

“We are aware of the state’s conversations with the Boring Company, and we have a number of operational questions to understand the potential impacts on Metro and Nashvillians,” Freddie O’Connell, Nashville’s mayor, said in an e-mailed statement.

Based in Pflugerville, Texas, The Boring Co. is poised to take over a chunk of public property about the size of a football field in downtown Nashville. The commission that’s meeting on Thursday includes Tennessee’s governor, speaker of the house, speaker of the senate and secretary of state. Members of the public were invited to give testimony but with less than a week’s notice.

On Monday, The Boring Co. and state officials divulged that Musk’s venture would dig its tunnels under state-owned roadways in order to “connect downtown and the Convention Center to Nashville International Airport with a transit time of approximately 8 minutes.”

It’s called the Music City Loop, and the project marks Musk’s latest effort to bolster his budding business empire in Tennessee. His artificial intelligence startup xAI, the parent of social media platform X, is building data centers and a power plant in Memphis, on the western side of the state.

The governor’s office said on Monday that the Nashville project would come “at zero cost to taxpayers” and would be “entirely privately funded,” though no details were provided about whether or what type of cost-benefit analysis, environment, safety or traffic assessment had been completed by the state before agreeing to the deal.

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Musk became a major force in Republican politics last year, when he spent almost $300 million to help reelect President Donald Trump before working for the Trump administration in the first few months of this year. Musk brought The Boring Co. CEO Steve Davis with him to lead Trump’s DOGE initiative, slashing federal agencies, regulations and personnel.  

Justin Jones, a Democratic state representative in Nashville, told CNBC on Wednesday that his district had not been able to participate in any public comment period, and hadn’t seen any environmental impact report or health assessment related to the Music City Loop or its construction.

‘Not allowed to be here’

On Wednesday evening, The Boring Co. held a recruiting event, with Davis in attendance, at the parking lot where the company expects the state to grant it a no-cost lease. Jones went to the event hoping to discuss the jobs that Musk’s company is looking to create in his district, the lawmaker told CNBC.

“The CEO is here and the other members of their team, but they sent someone out to tell me that I’m not allowed to be here,” Jones said in a text message, sharing a video of his interaction with The Boring Co. employees at the event.

On Monday, Jones arrived to a separate company event at the Nashville airport only to have authorities claim he lacked proper credentials to attend.

Jones told CNBC that state officials explained to him that only state-level authorizations would be required for The Boring Co. project to begin because the tunnels would go under state roads, and would not require the use of taxpayer funds.

“We’re not even being informed where or what exactly these tunnels are going to run through,” Jones said. “Tomorrow they’re voting to give away state land for no cost. But giving away land obviously has a cost.”

The governor’s office didn’t respond to a request for comment regarding Jones’ concerns. Representatives for The Boring Co. weren’t immediately available to comment.

The Boring Co. has previously built tunnels in Las Vegas, including an initial two miles to carry visitors to different exhibit halls around the Las Vegas Convention Center. Tesla drivers travel through the tunnels to pick up and drop off passengers, who book their rides using an app.

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The initial loop cost Nevada taxpayers about $50 million and has been criticized for a lack of pedestrian entrances, walkways and platforms, and its limitations relative to a subway system. The Boring Co. was previously fined by the Nevada Occupational Safety and Health Administration for repeated violations and worker injuries in Las Vegas.

The Musk-owned company also abandoned plans to build tunnels in other locations, including Chicago.

One particular concern in Nashville is that the city is prone to flooding with an average annual rainfall of around 50 inches, according to the National Weather Service, which compares to around 4 inches in Las Vegas. The city’s Metro Water Services previously arranged, with federal support, to purchase homes from residents in vulnerable areas at reduced prices, and convert the land there to green spaces.

The Boring Co. has no experience building in areas with that kind of rainfall and flooding concern.

The public hearing to discuss whether the state will give the parking lots to The Boring Co. in a no-cost, mutual benefit lease agreement starts at 8 a.m. local time on Thursday at Cordell Hull State Office Building, according to a copy of the agenda on the state government’s website.

In Memphis, xAI has faced a community backlash over its use of natural gas-burning turbines which power its data center and supercomputer there. The facility, housed in a former home appliance factory, is responsible for training xAI’s controversial chatbot Grok.

The NAACP and other environmental and public health advocates are suing xAI, saying the company exacerbated air pollution in the area, harmed majority-Black communities who live near their facilities, and violated the Clean Air Act. An xAI spokesperson said at the time the groups announced their intent to sue that the company takes “our commitment to the community and environment seriously.”

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Samsung’s profit more than halves, missing expectations as chip business plunges 94%

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Samsung's profit more than halves, missing expectations as chip business plunges 94%

Headquarters of Samsung in Mountain View, California, on October 28, 2018.

Smith Collection/gado | Archive Photos | Getty Images

Samsung Electronics on Thursday reported a second-quarter operating profit of 4.7 trillion Korean won, missing expectations, weighed by a 93.8% profit slump in its chip business.

While Samsung’s second-quarter operating profit beat its own forecast of around 4.6 trillion won, it was a steep drop from the 10.44 trillion won recorded in the same period last year.

The South Korean technology giant posted a quarterly revenue of 74.6 trillion won, up slightly from 74.07 trillion won a year earlier and beating its forecast of 74 trillion won. 

Here are Samsung’s second-quarter results compared with LSEG SmartEstimate, which is weighted toward forecasts from analysts who are more consistently accurate:

  • Revenue: 74.6 trillion won ($53.5 billion) vs. 74.43 trillion won 
  • Operating profit: 4.7 trillion won vs. 5.33 trillion won

Shares of Samsung fell by as much as 1.79% in early trading.

Notably, its Device Solutions division, which encompasses its memory chip, semiconductor design and foundry business units, recorded a 93.8% drop in operating profit year over year.

Samsung Electronics’ chip business posted an operating profit of 400 billion won in the second quarter, plunging from 6.45 trillion won in the same period last year. Chip revenue fell to 27.9 trillion won, from 28.56 trillion won last year. 

“Inventory value adjustments in memory and one-off costs related to the impacts of export restrictions related to China in non-memory had an adverse effect on profit,” the company said in a statement.

However, speaking in an earnings call, Samsung’s chief financial officer Soon-cheol Park voiced some optimism for the company in the near term.

“Despite ongoing global economic concerns driven by uncertain trade policies and geopolitical tensions, the IT industry appears poised for a gradual recovery fueled by increasing momentum in AI and robotics,” he said.

“In this context, we anticipate a rebound in our performance in the second half, following a bottoming out in the second quarter, with the earnings expected to improve steadily as the year progresses,” he added.

Foundry hopes, memory woes

Samsung’s foundry business could receive a boost in the following quarters from a $16.5 billion contract to supply chips to a major company in a deal announced on Monday. 

While Samsung did not initially disclose the counterparty, Tesla CEO Elon Musk has said that it was his American electric vehicle maker, and that the so-called AI6 chips would be made at Samsung’s upcoming fab in Taylor, Texas.  The deal could be even larger than what’s been announced, Musk added. 

The main aim of the Tesla deal for Samsung could be attracting other potential customers to its foundry business, Nam Hyung Kim, research partner and equity research analyst at Arete, told CNBC.

However, “production costs at the Taylor site are expected to be significantly higher than those in Korea,” he said, adding that it is far too early to conclude the deal will improve Samsung’s position against market leader Taiwan Semiconductor Manufacturing Company.

Samsung’s foundry business is currently at a “critical juncture between survival and profitability,” Neil Shah, vice president of research at Counterpoint Research, said in a pre-earnings statement.

Samsung, meanwhile, has been dealing with increased competition in its memory business, which makes chips used to store data in everything from servers to consumer devices such as smartphones and laptops. The company has traditionally been the market leader in the space.

But Samsung’s strength in memory is being threatened as it falls behind rival SK Hynix in high bandwidth memory, or HBM — a type of memory used for artificial intelligence computing. 

A report from Counterpoint Research earlier this month found that SK Hynix had caught up with Samsung’s memory revenues in the second quarter, with both now vying for the top position in the global memory market. 

In the second half of the year, Samsung said it plans to proactively meet the growing demand for high-value-added and AI-driven products and continue to strengthen competitiveness in advanced semiconductors.

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