US-EU digital divide deepens as Meta and Apple hold back product – it’s a mess

I warned about this over a year ago in Is the new Digital Divide in AI between the 'EU' and 'Rest of the World'? We saw Italy stupidly ban ChatGPT, then a similar rush to get a the Digital Markets Act and EU AI Act on top of the very odd GDPR legislation. As Taylor Swift says ‘players gonna play, haters gonna hate, fakers gonna fake’. That’s what this is largely about. Technocrats and legislators feel the need to play their regulatory game, fuelled by an intrinsic dislike of technology they’re going to rush it and because they’ve rushed it they make up things to legislate against.

AI has not proved to be a threat to anything or anybody. We’ve had several huge elections, including the EU parliament and even the bogeyman of deepfakes did not materialise. Meanwhile, the US economy is shooting ahead of Europe. The real issue is one of productivity and economic growth, not moral hazard.

This shows how the market is dominated by the US and China, not a single EU company is in this list:

Google

Three out of the top four EU fines have been against Google. To be fair these were good anti-competition fines that were right, not the more recent laws. It is here that the EU could play a strong and worthy role. However, it has not corrected the outright theft of revenues from tax havens within its own countries, most notably Ireland, where tax revenues are literally stolen on sales from other countries.

Facebook

The negativity and legislation in the EU is now coming home to roost as Meta have decided not to release their open-source ‘multimodal’ version of its Llama models in the EU. This is a crushing blow to both research and start-ups who use these models for product. This was in reaction to the setting of deadlines this month set by the EU. Note that this was actually in response to the opacity of GDPR not the new EU AI Act which will bring on a whole other set of problems.

Meta have made this bold move as the EU has not provided clarity over GDPR in relation to the use of customer data to train its AI models. My guess is that this is Facebook posts. You will not be able to use the coming multimodal version of Llama 3 Herd commercially, as it would break the license and open you up to being sued by Meta.

Apple

Apple have already stated that it is likely that Apple Intelligence will NOT be released in the EU later this year. Your iPhone and Mac will therefore be severely restricted within the EU. In fact, Apple Intelligence, is a clever attempt to protect your private data through edge computing. Apple's objection is, not against the EU AI Act but the Digital Markets Act. Apple claim it puts personal data and privacy at more risk. This is the danger of premature legislation. You cut off potential research and solutions to the very problems you are trying to solve.

This is worth some reflection. The aim is to increase competition. That is admirable, but despite decades of legislation there is no evidence that restricting innovation in US companies has actually led to home-grown solutions and companies. Note that this also means that any company using multimodal Llama and Apple Intelligence cannot be sold in the EU. It has a ripple effect that affects consumers and companies within the EU. The overall dampening effect of the legislation seems to do as much harm to Europe and the US. Meanwhile the Chinese make hay.

The threat for AI organisations, both public and private, is massive fines if they do not comply by August 2026 – the problem is, compliance to what? The legislation, in terms of huge putative fines, is simply too odd and vague for these companies to take the risk. 

X

Musk is suing the EU over their claim that the X blue tick breaches EU rules. He claims to have evidence that they asked for a secret deal. It's all very messy.

Conclusion

The EU AI Act was ratified by the European Parliament in March 2024 but a shadow lies over the whole processas it needs a ton of guidelines. Legislation like this is necessarily vague. On top of this there is a raft of legislation beyond this that is similarly vague. This shadow will dampen researcha dne commercial activity. I know this, as I get a ton of questions on this on almost every project.

As European influence diminishes in the world (it is only 5.8% of world’s population), the EU seems to be shooting itself in both feet, repeatedly. Rather than encourage research and the practical application of this technology to increase productivity and growth, it seems to want to play cops and robbers.

All of this is BEFORE the awful AI AU Act is enforced.