The Growing Tension Between EU Regulations and Global Industrial Strategies
This week, social media has been abuzz with statements from Roland Busch, the CEO of German multinational Siemens, who expressed concerns about the regulatory environment in the European Union. In an interview with Bloomberg, Busch highlighted that investing in China and the United States is more logical for his company due to the increasing regulatory burdens within Europe.
Busch emphasized that treating industrial and machine data the same way as personal data is illogical. He questioned how he could justify investments in an environment that hinders progress to his shareholders. This sentiment reflects broader frustrations among European industrial players regarding the current regulatory landscape, particularly concerning artificial intelligence (AI) and data governance.
The “Trump Effect”: A Shift in Industrial Investment
The potential loss of European industrial champions is a growing concern. The combination of deregulation, tax incentives, and the threat of tariffs in the United States has prompted many European companies to consider shifting their investments. U.S. President Donald Trump’s vision of making the U.S. the best place for job creation and business growth has resonated with some industry leaders.
The impact of this shift is evident in the list of 15 EU companies that have reportedly committed to investing in the U.S. These investments include significant sums from Siemens, such as $150 million for expanding production and relocating manufacturing operations, $285 million for US manufacturing and AI data centers, and $1 billion for scaling up US-based production of grid and gas turbine equipment.
German Perspective on Industry and Data
German companies like Siemens and SAP have long advocated for revising AI and data regulations to better suit the needs of large industries. This call for reform has found support from the German government, with Chancellor Friedrich Merz recently emphasizing the need for simplification, especially in AI regulations.
The upcoming Data Act, which aims to merge the Open Data Directive and the Data Governance Act, will be a critical point of discussion. The Data Union Strategy highlights concerns from manufacturers about sharing data due to trade secrets, privacy, and competition issues. Balancing these concerns with the need for a broader data economy remains a challenge for the EU.
Political Friction Behind AI Gigafactories
One of the key initiatives under the EU’s AI Continent Action Plan is the development of five AI Gigafactories. These facilities are designed to support the AI development needs of European industries. However, each Gigafactory requires a substantial number of chips, most of which currently come from the U.S.
The EU’s reaction to the Biden AI Diffusion Plan in early 2025 underscores its current limitations in producing these chips domestically. The European Chips Act, launched in 2022, aims to double Europe’s semiconductor market share by 2030. With global demand expected to grow by 25%, the sector is experiencing significant growth.
However, the urgent need for AI-optimised chips has led to the initiation of Chips Act 2.0, which seeks to bridge the gap between global AI-chip leaders and European capacity. Industry estimates suggest a need for at least 30-60 billion euros in EU funding, supplemented by 50-60 billion from Member States, resulting in a total investment of 200-300 billion euros.
Back to the AI Gigafactories – in early 2026, a group of countries ranging from France to Poland asked the Commission to provide more details about the conditions and rules before the call for AI Gigafactories was launched. France expressed concerns about the potential for AI Gigafactories and European taxpayer money ending up in the mass-purchasing of American chips without exploring European opportunities.
The challenge lies in facilitating the growth of the local chip industry while meeting immediate needs. For countries with globally competitive industries, the potential of exploring European alternatives may only delay the process and dilute already modest investments.
Moreover, while building on the existing successful European chip industry through the Chips Act 2.0 and additional investments is a logical move, the implementation and funding processes are likely to become entangled in bureaucracy and diverging interests. This will likely result in a slow process that won’t match the speed of American or Asian competitors.
