Issue #7 - September 25, 2025

The AI infrastructure arms race: Europe's $100 billion problem

NVIDIA's $100 billion investment commitment to OpenAI for 10 gigawatts of data center capacity dominated headlines this week, throwing Europe's AI infrastructure challenge into sharp relief. While the ASML deal with Mistral.AI represents significant progress for European ambitions, the scale differential is stark: where US players deploy tens of billions in single partnerships, European champions celebrate billion-euro rounds. Major US tech companies plan to spend over $300 billion in capital expenditures in 2025 alone, underscoring how the EU's capacity for leading AI infrastructure investments remains orders of magnitude behind American counterparts. We could always argue that NVIDIA's strategy consists in artificially creating demand for its chips, or that the AI bubble will eventually burst, leaving all of these promises in the dust, but another striking truth is that GenAI is slowly getting more and more adopted, and even if it had to plateau today, its performance at completing human tasks is sufficient to require a massive pool of data centers to complete these tasks when adoption grows. Europe has compelling advantages for data center investment: advanced nuclear capabilities, renewable energy leadership, and strong data protection frameworks. However, the continent lacks a coordinated approach. While France announced significant AI infrastructure investments at the AI Summit in Paris, EU member states risk competing against each other rather than presenting a unified value proposition for large-scale data center investments that could rival US facilities.

In an unprecedented move, Apple is asking the EU to repeal the DMA

As part of an official consultation by the European Commission on the Digital Markets Act (DMA) closing on Sept 25, Apple has provided a contribution, in which it states the following: "The DMA should be repealed while a more appropriate fit for purpose legislative instrument is put in place,". "The most effective way to repair the damage and prevent further harm would be a repeal of the law--or specific provisions--and a reset on digital competitiveness that puts users first". The (DMA) has never been greatly enjoyed by hyperscalers, and in a sense rightly so as it only targets a handful of companies, primarily Americans, that according to the EU have become gatekeepers. Once a specific product is considered a "core platform service" by the European Commission, the company who owns it must adapt it to allow more competition and choice for EU customers. Over the past months, Apple, Meta, Google and Amazon have become more and more vocal about the risks the DMA poses to their activities. Meta has been adapting its products (Facebook and Instagram) so EU users can, for a subscription fee, access the services without having to share their personal data. Personalised ads represent the core of Meta's business model. Apple's services, notably the App Store, is in scope. The EU fined Apple €500 million in April. Arguably, the compliance complexity for the products targeted by the DMA makes things extremely hard to launch or change. In a very fast-paced tech environment, notably with GenAI, most of the products end up in the EU market much later than they used to, or sometimes with fewer capabilities, when they do, furthering the tech gap between the EU and the rest of the world. Still, Apple's request to drop the DMA represents a significant escalation from a company that, while historically vocal on privacy issues, has rarely challenged entire regulatory frameworks. While Apple is the first tech company to make such a request, critics have strengthened over the past months, largely supported by the US administration and Trump himself has put pressure on countries who would conduct "discriminatory actions" against US companies. DMA fines can go up to 10% of global revenue for companies that do not comply.

What I’ve been reading

Meet the insurgent economists promoting a global wealth tax, The Financial Times, May 2025

Gabriel Zucman was, until a month ago, living an anonymous life in France, leading, as a professor of economics, a department at the Paris School of Economics. His name is now associated with a political controversy over whether the super rich should be further taxed. "Zucman law" has also created turmoil in the French tech ecosystem, with the CEO of Mistral, who is now considered a billionaire thanks to the valorisation of his company, stepping up to welcome more "tax justice" but without going so far as to support the Zucman tax.

The unfortunate EU foot-dragging on the Draghi plan, The Financial Times, September 21, 2025

The editorial board of the FT calls for a "coalition of the willing" to move forward with certain recommendations of Draghi's report. Inertia is even considered a mere respect of "the rule of law". Maybe the law should rightly evolve, but that would ultimately require a new treaty for innovation and competitiveness that would put the EU first. We've done it with the Euro, it's likely time to consider it again.