Why are Apple and Facebook Threatening to put Europe in the AI Naughty Corner?

Meta, the company that owns Facebook, has announced that it will not release its advanced AI model (an update to Llama) in the EU. They say this is because they fear European regulations. This news comes hard on the heels of Apple’s announcement that its generative AI tools may not be available in the EU.

Apple and Meta are citing the new EU AI Act and Digital Markets Act as two examples of the regulations they are concerned about. The first seeks to create a safer context for the development and deployment of AI, and the second seeks to limit the oligopolistic powers of big tech companies.

One interpretation of the actions of Apple and Meta is that they are trying to lobby or bully EU and European legislators and regulators (your choice of verb reflects your starting point). An alternative view is that these companies are willing to forgo revenue and market share in Europe to be able to advance their position in other markets (in the US in particular).

How might this affect EU-based companies?

In the short term, Apple’s actions are more likely to affect consumers than businesses. For businesses, the potential loss of access to the new Llama is a concern, but Llama is currently a minor player. Changes in which versions of Gemini, Claude, and especially ChatGPT were available would be a bigger worry.

What should companies be doing right now?

To be honest, whilst it makes sense to monitor the situation, there are few steps companies can meaningfully take at the moment about the EU versus the rest of the West. If key products become unavailable in the EU and if there are not substitutes, then companies will need to take actions. But we are still quite a long way from that situation. However, it is clear that globally there is going to be an avalanche of legislation and regulation in the AI zone, and companies should be seeking to make their systems robust, documented and transparent.

There are two philosophies, neither currently proven, about regulation. Let’s take the regulations about energy efficiency as an example. One group believes that in their market, the regulations should be as light as possible, allowing them to market profits that can be invested in growth. The second group wants regulated markets because this will enable them to be global leaders in making energy-efficient products.