Europe's tech giants blast 'rigid' bloc rules, call for urgent change

CEOs from some of Europe’s biggest tech companies with joint market cap of €1.1 trillion ($1.3 trn) have signed an op-ed calling for more lenient AI regulations to innovate faster on new technologies. 

Seven chief executives from the likes of Mistral AI, SAP and ASML, the biggest chipmaker in Europe, met with European Commission President Ursula von der Leyen in Brussels last week to discuss the bloc’s technology legislation. 

CEO of the Paris-based foundation-model maker Mistral AI, Arthur Mensch, said, “What Mistral AI (and many others) will do in the coming months will impact Europe’s prosperity and autonomy for the decades to come” in a post circulating the op-ed. 

"More than three years after the 'ChatGPT ​moment', Europe is still debating regulation, while ​others have long shifted focus to scaling AI in physical ‌systems ⁠and robotics," the execs wrote. 

Legacy tech giants call for lighter regs

Mensch was joined by CEOs at SAP, Airbus, ASML, Ericsson, Nokia and Siemens in the call for better collaboration between policymakers and technology companies to prevent European countries falling behind China and the US. 

Of the seven signatories, two can trace their founding dates back as far as 1847 (Siemens) and 1865 (Nokia). Mistral AI is the only company founded in this millennium.

The European tech leaders criticised stifling and often overlapping EU regulations that make it difficult to compete at the global level and pushed for more support from business-favourable policies and M&A rules to let European companies grow faster. 

The companies said policy makers must “reduce and simplify Europe’s digital rules” to “agile guardrails rather than rigid, detailed requirements” causing the EU to lose out on “global competitiveness each and every day”.

The European Union will resume discussions about streamlining its 2024 AI Act in May. The act drew criticism for being overly complicated and cautious.

EU's issues are bigger than policy

The execs say they face “fragmented markets and ​subsidized rivals with very strong market ​penetration ⁠in the EU.” There has been a growing concern in the bloc about an overreliance on proprietary technology from the US.

Unfriendly policies such as the 2018 CLOUD Act and pressure from the Trump administration on US tech companies to fall in line has pushed European companies and governments to investigate untangling their tech stacks from US dependencies. 

However, some critics aren’t convinced that technology-positive regulations can make a significant difference. 

Rakuten Mobile's senior vice president for innovation and advanced research, Dr. David Soldani, said Europe's challenge on staying competitive was "not at the application level, but on the compute platform and the stack".

"Europe missed both," he wrote on LinkedIn, adding, that the bloc was also behind when it came to developing programmable energy resources to power compute.

General partner at European venture capital firm Speedinvest Daniel Keiper-Knorr suggested the European market needed to go one step further and create a united capital market that includes all publicly traded companies in Europe.

Keiper-Knorr said, “No grants, no subsidies, no programs, no public money, no state guarantees can ever come close to what a united capital market is able to do.”

“Each single European market is undercritically small. But all markets combined will have the critical mass to attract new capital and more listings, to allow European companies go public in Europe and stay here,” he added.