U.S. ambassador to the European Union Andrew Puzder told CNBC that Europe needs to reconsider strict regulatory approaches toward American technology companies if it wants to remain a participant in the expanding artificial intelligence economy.
Speaking on CNBC's "Europe Early Edition," Puzder said the foundations of an AI ecosystem - data centers, access to data and the U.S. hardware stack that underpins many AI systems - are provided by the very companies facing regulatory pressure. "If you regulate them off the continent, you're not going to be a part of the AI economy," he said, emphasizing that heavy-handed enforcement could reduce the presence of those providers in the EU.
Puzder warned against over-regulation, changing compliance expectations after the fact and imposing large monetary penalties. He urged European policymakers to carefully weigh how regulatory choices affect the willingness of U.S. firms to continue doing substantial business in the EU.
"You know the very companies that can bring you the data, the data centers and the American AI hardware stack," Puzder said. "If you regulate them off the continent, you're not going to be a part of the AI economy." He added that Europe should take a careful look at what it is doing in relation to those companies, and that the companies should evaluate the prospects of continuing significant operations in the EU.
The ambassador's remarks come amid a series of enforcement actions taken by the European Commission over the past year against U.S.-based technology firms, actions that have drawn criticism from officials in President Donald Trump's administration.
Recent measures and penalties cited in connection with the broader regulatory environment in Europe include:
- A 200 million euro fine imposed in April related to policies at WhatsApp, followed by a warning in February that additional measures could be applied to Meta to reverse that AI-related policy;
- A 500 million euro fine levied against Apple in February;
- A 2.95 billion euro fine against Google in September;
- A 120 million euro fine imposed on Elon Musk's social media app X in December, which prompted Secretary of State Marco Rubio to call the penalty "an attack on all American tech platforms and the American people by foreign governments" in a post on X;
- Formal proceedings opened by the Commission to examine whether Snapchat, owned by Snap, complies with the Digital Services Act on child safety online.
Those enforcement steps form the backdrop to Puzder's warning that punitive regulatory approaches could deter firms that provide critical infrastructure for AI from maintaining or expanding operations in Europe.
As regulatory scrutiny continues, the dynamics between EU policy choices and the commercial decisions of major U.S. technology companies will remain a focal point for observers tracking the development of AI infrastructure and services across the continent.
Key takeaway: The ambassador framed continued EU access to the AI economy as contingent on a regulatory environment that does not drive away the companies supplying data, data centers and hardware.