Tech Giants Withhold AI Products from EU Amid Regulatory Concerns

Big Tech withholds its products from the EU in response to regulation

Driving the news: As Axios scooped on Wednesday, Meta has decided not to release a new multimodal AI model and related products in the EU. Between the lines: While both companies are objecting to the vagueness and opacity of European law, Meta and Apple are taking issue with two different laws. Apple's objection is to the Digital Markets Act, relatively new legislation that aims to increase competition and keep large companies from favoring their own products. Meta's problem is with Europe's older privacy law, the GDPR. Yes, but: While Apple and Meta are signaling their unhappiness with the current state of European regulation, it's doubtful they would give up entirely on such a large market as tech enters a new era of computing with the advent of generative AI. The intrigue: If neither side blinks, no one knows for sure how the market will evolve. The tighter EU rules have led to changes in policy at the tech firms -- and those changes have often been adopted globally, conferring additional protections or options for consumers around the world. What we're watching: If companies like Apple and Meta keep withholding products and services from the EU and local alternatives do step in to fill the gap, the whole global online market could change.

After Apple, Meta withholding future AI models from EU countries

Apple said last month that it would be withholding its upcoming AI features from EU countries, and now Meta has followed suit, and for exactly the same reason. The iPhone maker cited "regulatory uncertainties" in the bloc, and Meta has given the same explanation for its own decision to hold back future AI models ... Apple Intelligence features are set to begin their rollout in the fall, but the company said that it would not make these available in EU countries. "Due to the regulatory uncertainties brought about by the Digital Markets Act, we do not believe that we will be able to roll out three of these [new] features -- iPhone Mirroring, SharePlay Screen Sharing enhancements and Apple Intelligence -- to our EU users this year." The statement did leave open the possibility that the features would be made available in the EU at a later date. The EU's competition regulator described Apple's decision as a "stunning open declaration" of anticompetitive behavior. Axios reports that Meta is taking the same position, using almost identical wording. Meta will withhold its next multimodal AI model -- and future ones -- from customers in the European Union because of what it says is a lack of clarity from regulators there, Axios has learned [...] "We will release a multimodal Llama model over the coming months, but not in the EU due to the unpredictable nature of the European regulatory environment," Meta said in a statement to Axios. Meta already uses a multimodal AI -- one capable of processing video, audio, images and text -- in its Meta Ray-Ban smart glasses, which I've been testing. The glasses are capable of recognizing buildings, artwork, flowers, and more. The company plans to bring the same capabilities to other devices, and to further enhance the capabilities with more advanced models. Apple and Meta are not exactly best buddies, but the near-identical statements here suggest that the two companies are of one mind on this -- and have very possibly had informal conversations about how best to address the issue. The European Union is a massively important market for both countries, accounting for roughly a quarter of Apple's global income. (Apple's Europe region includes the UK and Switzerland, but it's a good approximation.) Neither company will really want to follow through on this. They not only sacrifice income by doing so, but they also risk annoying a large percentage of their customers, who very much want to get their hands on the new tech. Both Apple and Meta are playing a high-stakes poker game, betting that the EU will back down in the face of this threat by agreeing not to instigate antitrust proceedings against them for launching their AI products and services in the region. The EU hasn't shown much inclination to respond to this type of pressure in the past, but the more tech giants who do the same, the greater the likelihood that it would have to reluctantly do so. Could Google be next?