Google, Meta execs blast Europe over strict AI regulation as Big Tech ups the ante
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.”
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.
Anne Wojcicki attends the WSJ Magazine Style & Tech Dinner in Atherton, California, on March 15, 2023.
Kelly Sullivan | Getty Images Entertainment | Getty Images
23andMe CEO Anne Wojcicki and New Mountain Capital have submitted a proposal to take the embattled genetic testing company private, according to a Friday filing with the U.S. Securities and Exchange Commission.
Wojcicki and New Mountain have offered to acquire all of 23andMe’s outstanding shares in cash for $2.53 per share, or an equity value of approximately $74.7 million. The company’s stock closed at $2.42 on Friday with a market cap of about $65 million.
The offer comes after a turbulent year for 23andMe, with the stock losing more than 80% of its value in 2024. In January, the company announced plans to explore strategic alternatives, which could include a sale of the company or its assets, a restructuring or a business combination.
23andMe has a special committee of independent directors in place to evaluate potential paths forward. The company appointed three new independent directors to its board in October after all seven of its previous directors abruptly resigned the prior month. The special committee has to approve Wojcicki and New Mountain’s proposal.
“We believe that our Proposal provides compelling value and immediate liquidity to the Company’s public stockholders,” Wojcicki and Matthew Holt, managing director and president of private equity at New Mountain, wrote in a letter to the special committee on Thursday.
Wojcicki previously submitted a proposal to take the company private for 40 cents per share in July, but it was rejected by the special committee, in part because the members said it lacked committed financing and did not provide a premium to the closing price at the time.
Wojcicki and New Mountain are willing to provide secured debt financing to fund 23andMe’s operations through the transaction’s closing, the filing said. New Mountain is based in New York and has $55 billion of assets under management, according to its website.
23andMe declined to comment.
WATCH: The rise and fall of 23andMe
Hims & Hers
Shares of Hims & Hers Health tumbled more than 23% on Friday after the U.S. Food and Drug Administration announced that the shortage of semaglutide injection products has been resolved.
Semaglutide is the active ingredient in Novo Nordisk‘s blockbuster weight loss drug Wegovy and diabetes treatment Ozempic. Those medications are part of a class of drugs called GLP-1s, and demand for the treatments has exploded in recent years. As a result, digital health companies such as Hims & Hers have been prescribing compounded semaglutide as an alternative for patients who are navigating volatile supply hurdles and insurance obstacles.
Compounded drugs are custom-made alternatives to brand-name drugs designed to meet a specific patient’s needs, and compounders are allowed to produce them when brand-name treatments are in shortage. The FDA doesn’t review the safety and efficacy of compounded products.
Hims & Hers began offering compounded semaglutide to patients in May, and it owns compounding pharmacies that produce the medications.
Compounded medications are typically much cheaper than their branded counterparts. Hims & Hers sells compounded semaglutide for less than $200 per month, while Ozempic and Wegovy both cost around $1,000 per month without insurance.
The FDA said Friday that it will start taking action against compounders for violations in the next 60 to 90 days, depending on the type of facility, in order to “avoid unnecessary disruption to patient treatment.”
“Now that the FDA has determined the drug shortage for semaglutide has been resolved, we will continue to offer access to personalized treatments as allowed by law to meet patient needs,” Hims & Hers CEO Andrew Dudum posted Friday on X. “We’re also closely monitoring potential future shortages, as Novo Nordisk stated two weeks ago that it would continue to have ‘capacity limitations’ and ‘expected continued periodic supply constraints and related drug shortage notifications.'”
Him & Hers’ weight loss offerings have been a massive hit with investors. Shares of the company climbed more than 200% last year, and the stock is already up more than 100% this year despite Friday’s move.
Even before it added compounded GLP-1s to its portfolio, the company said in its 2023 fourth-quarter earnings call that it expects its weight loss program to bring in more than $100 million in revenue by the end of 2025.
Despite the turbulent regulatory landscape, Hims & Hers has showed no signs of slowing down.
On Friday, the company announced it has acquired a U.S.-based peptide facility that will “further verticalize the company’s long-term ability to deliver personalized medications.” Hims & Hers will explore advances across metabolic optimization, recovery science, biological resistances, cognitive performance and preventative health through the acquisition, the company said.
That move comes just days after Hims & Hers also bought Trybe Labs, the New Jersey-based at-home lab testing facility. Trybe Labs will allow Hims & Hers to perform at-home blood draws and more comprehensive pretreatment testing.
Hims & Hers did not disclose the terms of either deal.
Technology
Tesla recalls more than 375,000 vehicles in U.S. due to failing power-assisted steering systems
Tesla models Y and 3 are displayed at a Tesla dealership in Corte Madera, California, on Dec. 20, 2024.
Justin Sullivan | Getty Images
Tesla is voluntarily recalling 376,241vehicles in the U.S. to correct an issue with failing power-assisted steering systems, according to records posted to the website of the U.S. National Highway Traffic Safety Administration.
In a safety recall report posted on the NHTSA website, Tesla said the recall includes Model 3 and Model Y vehicles that were manufactured for sale in the U.S. from Feb. 28, 2023, to October 11, 2023, and that were equipped with a certain older software release.
The records said printed circuit boards in the steering systems in affected vehicles could become overstressed, causing the power-assist steering to fail in some cases when a Tesla vehicle rolled to a stop and then accelerated.
When electronic power-assist steering systems fail in a Tesla, drivers need to exert more force to steer their cars, which can increase the risk of a collision.
Tesla told the vehicle safety regulator that it was not aware of any crashes, injuries or deaths related to the power steering failures, and that it was offering an over-the-air software update as a remedy.
The recall follows an earlier related probe and voluntary recall in China concerning the same systems.
President Donald Trump has appointed Tesla CEO Elon Musk to lead a team that is slashing the federal government workforce, and in some cases, regulations and entire agencies. Those cuts already affected the NHTSA, an agency Musk has long seen as standing in the way of some of his ambitions at Tesla.
The regulator has been engaged in a yearslong investigation into safety defects in the systems that Tesla markets currently as its Autopilot and Full Self-Driving (Supervised) options. The features do not make Tesla cars into robotaxis. They require a human driver ready to steer or brake at any time.
The Washington Post reported on Thursday that Musk’s team has led mass firings at the NHTSA, reducing the agency’s workforce and capacity to investigate companies including Tesla by about 10%.
Tesla didn’t respond to a request for comment.
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