AI Geopolitical Economy Week #3125

The week opened with movement on Europe’s new AI rules. Google confirmed that it will sign the EU’s voluntary code of practice for general‑purpose AI models. Microsoft’s Nanna-Louise Linder, VP of European Government Affairs, shared a post on her LinkedIn account that the company has signed the code to build trust and demonstrate “compliance with EU law, while recognizing that the AI Act is a complex regulation that would benefit from simplification”. Meta, on the other hand, has declined due to legal uncertainty, leaving the EU with a mixed response from U.S. tech giants.

In the UK, the Competition and Markets Authority (CMA) published the final report from its 21‑month cloud‑services investigation, concluding that Amazon and Microsoft command up to 70 % of UK cloud spending and that their dominance stifles competition and harms UK businesses. The CMA recommended designating both firms with “Strategic Market Status” under the new UK digital markets regime. Microsoft and AWS dismissed the findings as “ignoring that the cloud market has never been so dynamic and competitive, with record investment, and rapid AI-driven changes”.

In the US, President Trump’s AI Action Plan signaled a sharp shift toward deregulation and export‑led growth. The White House said the plan will partner with industry to export full‑stack AI “packages” to allies, streamline permits for data centers and semiconductor manufacturing, and remove federal regulations that slow deployment. One executive order requires AI systems bought with federal funds to be “objective and free from top‑down ideological bias”. The Guardian highlighted that the three orders at the heart of the plan are designed to turn the U.S. into an “AI export powerhouse,” loosen environmental rules for large data‑center projects, and roll back Biden‑era safety guardrails. Tech companies, including Microsoft, IBM, Meta, Palantir, Nvidia, Anthropic, and Elon Musk’s xAI, celebrated the plan as a green light for rapid expansion.

Australia, meanwhile, broadened its world‑first social‑media age ban: YouTube will join Facebook, Instagram, Snapchat, TikTok and X on the list of platforms that must ensure users are at least 16 years old. Communications Minister Anika Wells said the change follows evidence that 40% of children who reported online harm encountered it on YouTube; the new rules take effect 10 December and carry fines of up to AU$50 million for platforms that fail to exclude under‑16 account holders.

Finally, trans‑Atlantic trade diplomacy took center stage this week. President Trump and European Commission President Ursula von der Leyen reached a high‑level deal that averts a tariff war by imposing a 15 % US tariff on most EU goods (half of the previously threatened 30%). In return, the EU agreed to invest $600 billion in the US and purchase $750 billion worth of US energy, while promising to remove tariffs on US industrial exports and address non‑tariff barriers. The agreement is politically significant but leaves many details to be negotiated; digital‑regulation issues remain contentious, with the EU reiterating that it will not adopt network‑usage fees and will maintain zero duties on electronic transmissions. Observers note that the “handshake” could still be used by Washington to pressure Brussels on technology rules, making next steps worth watching. The deal has been highly criticized in Europe as a move of diplomatic submission.

Below are the shortlisted articles for this week’s issue of AI Geopolitical Economy.

Happy reading!

EU Tech Policy

Google to sign EU’s AI code of practice despite concerns

Meta halts political advertising in the EU due to ‘unworkable’ rules

Big tech hits back as CMA flags ‘harmful” cloud dominance by Microsoft and AWS

Dominance of Amazon and Microsoft in cloud harming competition, UK says

Denmark to drive GDPR simplification

EU Commission nearly doubles research, innovation fund in long-term budget

EU lawmakers to push for another Amazon hearing in the autumn

US Tech Policy

White House Unveils America’s AI Action Plan