President Trump’s new AI Action Plan gets the big picture right: America’s private sector—not government central planners—should lead AI development. But to achieve that goal, the administration will have to do more than roll back domestic red tape. It must also confront a growing threat from abroad: the European Union’s data strategy, which deliberately hobbles US tech companies while advantaging their Chinese competitors.
The Trump plan lays out a sensible, market-driven vision for AI. It recognizes that AI is fueling a new industrial, intellectual, and creative revolution—one that stresses open pathways for innovation, not government gatekeeping.
The Biden administration took the opposite approach, treating AI as a problem to be managed with regulation. Trump’s plan flips that script. It directs federal agencies to repeal outdated rules, seek input from the public and innovators, and prevent state-level overreach that could choke off progress.
But AI doesn’t stop at national borders—and neither do efforts to stifle American leadership.
Since 2020, the EU has been rolling out its European Strategy for Data, an ambitious plan to build a continent-wide “single data space.” The rhetoric is about sharing data across borders to boost innovation. In practice, it’s a system of compelled transfers—often free of charge—from US and European companies to rivals, including those in China.
Two key laws underpin the strategy. The Data Governance Act (in force since 2023) sets the terms for reusing sensitive data, while the Data Act (taking effect in September 2025) forces makers of connected devices—from smart home tools to industrial equipment—to give users real-time access to the data those devices generate. That access extends to businesses, including direct competitors. US companies must comply if they operate in Europe.
But here’s the kicker: in the name of “digital sovereignty,” Europe is putting more data into the hands of Chinese AI companies and cutting out US tech firms.
The Data Act explicitly blocks “gatekeepers”—a term defined by the EU’s Digital Markets Act to include US firms like Apple, Amazon, Google, Meta, and Microsoft—from accessing this European data under the same rules as their Chinese AI rivals, like DeepSeek and iFlyTek. The only Chinese firm considered to be a gatekeeper is ByteDance.
The EU sees this as leveling the playing field. In truth, it’s a kind of flawed regulatory protectionism—one that hurts European consumers and startups as much as it punishes American firms.
European leaders treat data as if it’s a natural resource waiting to be unlocked. But data is created by companies that invest in sensors, cloud systems, customer interfaces, and analytical tools.
If firms are forced to share their data with rivals or risk exclusion from key markets, they’ll produce less data. And what data they produce will be of lower value because the firms will not invest in data quality and because the data will lose all uniqueness, something that is important for creating new AI products.
We’ve seen this pattern before. The EU’s 2018 General Data Protection Regulation (GDPR) was supposed to empower users. Instead, it suppressed development, cut venture investment, and slowed startup formation. Now the EU is compounding that mistake—layering GDPR, the European Strategy for Data, and the Digital Markets Act into a regulatory thicket.
The consequences are already visible. European startups struggle to scale. Venture capital is scarce in Europe. Europe has barely half as many data centers per dollar of GDP as the US. That’s not a blueprint for AI leadership.
If the Trump administration wants to secure America’s place at the forefront of the AI revolution, it must call out these distortions and work with allies to prevent them from becoming global norms. That means pushing back against regulatory models that punish success and making clear that open markets—not forced asset transfers—are the key to progress.
Europe’s “data sovereignty” risks tilting the AI playing field contrary to both European and US interests. The Trump administration should lead the way towards a global market-oriented innovation ecosystem where both American firms and European firms can thrive.
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