This Dutchman moved to San Francisco a year ago to help tech giants prepare for new EU rules
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.”
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
Technology
SoftBank leads decline in Japanese tech stocks as worries over AI spending spill over to Asia
TOKYO, JAPAN – FEBRUARY 03: SoftBank Group CEO Masayoshi Son delivers a speech during an event titled “Transforming Business through AI” in Tokyo, Japan, on February 03, 2025. SoftBank and OpenAI announced that they have agreed a partnership to set up a joint venture for artificial intelligence services in Japan.
Tomohiro Ohsumi | Getty Images News | Getty Images
Japanese tech stocks took a tumble on Thursday as AI infrastructure spending worries on Wall Street crossed the ocean into the Asian markets, with AI-related stocks declining.
Softbank Group Corp was among the top losers in the benchmark Nikkei 225, falling as much as 7.25%, with the index leading losses in Asia, down 1.23%. The group pared some losses and was last trading 3% lower.
This decline comes as the tech-heavy Nasdaq Composite fell 1.81% overnight, dragged by losses in Oracle, Broadcom, Nvidia and other AI plays.
The losses in Oracle came after the Financial Times reported on Wednesday that Blue Owl Capital’s plans to finance the cloud infrastructure company’s $10 billion Michigan data center had stalled. The company last week had refuted a report that said it had delayed some projects for AI major OpenAI to 2028.
Tech-focused SoftBank has seen sharp volatility in its stock over the past month as fears over AI-related spending have gripped the market.
At the start of the year, the group had revealed plans to invest $500 billion in AI infrastructure in the U.S. along with OpenAI, Oracle and other partners, and in September it announced five new U.S. AI data center sites under Stargate, OpenAI’s overarching AI infrastructure platform.
Other Japanese tech stocks also fell. Semiconductor equipment supplier Advantest, dropped as much as 5%. Counterparts Lasertec, Renesas Electronics and Tokyo Electron declined between 3% and 4%.
Jesper Koll, expert director at Tokyo-based financial services firm Monex Group, said much of what goes into data centers, power centers, and AI hardware enablers is “Made in Japan, and can only be made in Japan.” That makes Japanese tech, especially AI-related stocks more vulnerable to any worries around U.S. tech spending.
On Wednesday, Japan’s trade numbers showed that exports of electrical machinery jumped 7.4%, and semiconductor-related exports surged 13% year on year. Koll said the U.S.-led boom in tech spending was translating into growing exports of specialized machinery and equipment.
Losses were less pronounced in South Korean chip heavyweight Samsung Electronics at 0.93%, while SK Hynix reversed course to gain 0.73%. Taiwan’s TSMC, the world’s largest contract chip manufacturer, was marginally down.
MetaX booth at the Shanghai New Expo Center in Shanghai, China, on July 26, 2025. (Photo by Ying Tang/NurPhoto via Getty Images)
Nurphoto | Nurphoto | Getty Images
It felt like déjà vu when shares of chipmaker MetaX Integrated Circuits soared 700% in its Shanghai market debut on Wednesday. Moore Threads surged over 400% on its first day of trading just two weeks earlier.
They’re the latest Chinese AI chip companies the country’s investors are ploughing money into, as it races to develop its own semiconductors and challenge Nvidia’s dominance in the face of U.S. export curbs.
Both are developing graphics processing units (GPUs), the type of chip manufactured by Nvidia and used for advanced AI.
Investor enthusiasm around Chinese AI-chip IPOs is partly shaped by longer-term expectations that China will build a self-sufficient semiconductor ecosystem as tensions with the U.S. continue, Macquarie’s equity analyst Eugene Hsiao told CNBC.
Washington has barred sales of Nvidia’s most advanced semiconductors to the country. While U.S. President Donald Trump relaxed export curbs for some Nvidia chips, regulators in the country were planning to limit access to the company’s processors, the Financial Times reported earlier this month, as it looks to wean itself off overseas tech in the AI race.
None of China’s AI chipmakers — which include a cohort of tech giants like Huawei, Alibaba and Baidu — have been able to develop processors comparable to Nvidia’s most advanced so far.
But while significant barriers remain in overcoming export control restrictions in some areas of its chip supply chain, like equipment, it’s made significant strides in others, such as memory.
Here’s how the market of China’s AI chip Nvidia rivals is shaping up.
Huawei
Privately-owned tech giant Huawei develops the Ascend series of chips, with its next-generation model, the 950, to be launched in 2026. Nvidia told CNBC that “competition has undeniably arrived” when the new systems were announced.
While its previous Ascend models have not been considered competitive with Nvidia’s on a chip-by-chip basis, Huawei has been able to build high-performance “clusters” to rival the US chipmaker’s most advanced systems by linking more of its processors.
“This strategy relies on high-speed, potentially optical interconnects to move data quickly across large clusters – a setup that doesn’t require top-end chips and therefore suits China’s current strengths,” Brady Wang, associate director at Counterpoint Research, told CNBC in November.
Baidu
China’s biggest search platform, Baidu, has increasingly funneled more resources into AI and is a majority shareholder in chip designer Kunlunxin. In November, the company unveiled a five-year roadmap for its Kunlun AI chips, unveiling new processors in 2026 and 2027.
Baidu, which is traded on the Nasdaq, uses a combination of self-developed chips and Nvidia products in its data centers to run its in-house AI models. The company has looked to position itself as a “full-stack” provider, producing chips, servers, data centers, and AI models and applications.
“Kunlunxin has emerged as a leading domestic AI chip developer, focusing on high-performance AI chips for large language model (LLM) training and inference, cloud computing, and telecom and enterprise workloads,” analysts at Deutsche Bank said in a note in November.
JPMorgan said in a November note that it viewed the Kunlun AI chip as one of the “best-positioned” as Chinese hyperscalers increasingly source from local solution providers.
Alibaba
E-commerce giant Alibaba — which is sometimes compared with Amazon as it is one of the biggest cloud providers locally — began developing AI chips in the late 2010s. It was developing a new AI chip in August, CNBC reported, specifically designed for inference rather than training.
Alibaba’s share rose in September after reports that the company had secured a major customer for its AI chips.
“Improved performance of its self-developed chip” was one of the factors that supported revenue growth in the cloud division at Alibaba, Morningstar analyst Chelsey Tam said in September.
Cambricon
Cambricon, which is developing chips for AI training and inference, posted record profits in the first half of 2025 as revenue surged. The chipmaker, founded in 2016, said revenue rose more than 4,000% year-on-year to 2.88 billion Chinese yuan ($402.7 million) and net profit hit a record 1.04 billion yuan.
“We view Cambricon as the most plausible winner in China’s AI accelerator market, which is still at its early stage when compared to the US market on chip accessibility issue,” Jamie Mills O’Brien, investment director at investment group Aberdeen, told CNBC by email.
“We see multiple roadblocks being digested in next 1-2 years, including fab maturity, client acceptance, and ecosystem formation, which is likely to set Cambricon a ‘good enough’ alternative to Nvidia’s downgraded chips in China.”
An illustration photo shows Moore Threads logo in a smartphone in Suqian, Jiangsu Province, China on October 30, 2025.
Cfoto | Future Publishing | Getty Images
Other AI chip companies
MetaX raised nearly $600 million in its initial public offering on Wednesday, five years on from its founding by former AMD executive Chen Weiliang.
Founded in 2020 by a former general manager of Nvidia’s Chinese arm, Moore Threads is sometimes referred to as “China’s Nvidia.”
It’s set to launch its latest GPU architecture at a Beijing developer conference later this week, according to a report in the South China Morning Post.
The company said in its listing that IPO proceeds were needed to accelerate core research and development initiatives, including producing new self-developed AI training and inference GPU chips.
Enflame was founded by former AMD employees in 2018 and designs chips for data centers focused on AI training and processes.
Biren Technology, founded in 2019, is designing high-performance GPUs and was approved for an IPO by the Chinese regulator on Tuesday, according to reports from Reuters and the South China Morning Post.
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