Lawmakers have failed to extend a surveillance law that allows US intelligence agencies to monitor targets abroad without a warrant.

Congress rejected a vote to extend Section 702 of the Foreign Intelligence Surveillance Act to July 2, which means, for a few days at least, some surveillance will be put on hold, for the first time since the Act was passed in 2008. The next possible chance for a vote will be June 28.

This has significance for CISOs because they need to be aware of how communication between the US and other countries is being monitored. The Act permits US intelligence agencies to collect texts and emails sent to and from foreigners living outside the US without a warrant — and when those communications are to or from an US citizen, it allows them to scoop them up too.

“For too long, the FBI has been able to piggyback on a major national security tool as an unconstitutional backdoor way of reading Americans’ communications,” Electronic Frontier Foundation Senior Policy Analyst Matthew Guariglia wrote in article about the renewal vote this week.

It is uncertain what will happen next. Some commentators expect things will proceed as if the Act had been extended, possibly through an executive order.  However, the industry may well revolt against this and we could see some tech providers take legal action.

This article first appeared on CSO.

A German court has sparked a legal controversy by ruling that Google is responsible for defamatory comments generated by its own AI system. The search giant had argued that it couldn’t be blamed for the false results, but a Munich court has deemed that not to be the case and has ruled in favor of the two unnamed plaintiffs, both publishing companies, who the Google AI Overview inaccurately said engaged in shady business practices.

Google is required to remove the comments and ensure that they are not repeated. The case is certainly going to raise some questions globally. Will this mean that other courts are going to rule against AI vendors?

Bernhard Buchner, a partner at Lausen Rechtsanwälte, the legal firm that acted for the plaintiffs, said, “I believe it shows that online providers such as Google cannot hide behind the fact that a statement was generated by AI, but rather that they can be held liable for its output. It is an important step towards ensuring that providers of AI systems have to take responsibility for their outputs.”

So, does this mean that the decision could be replicated in the US or elsewhere? Alex Shahrestani, managing partner at Austin-based Promise Legal, said, “the short answer is ‘yes’:  the Munich ruling travels, because US courts are already making the same move.”

He explained that Section 230 of the US Communications Decency Act, which has been applied to protect online service providers like social media companies from lawsuits based on their decisions to transmit or take down user-generated content, was built for computer bulletin boards, “not for a model that writes its own answers. Once the AI is the author, the company is the publisher.”

This means, he said, “businesses now need named humans at accountability nodes, verification gates before AI output ships, and audit trails that survive discovery, because ‘the model recommended it’ is a legally empty sentence.”

Does the decision mean that other AI providers could find themselves in the same position? Buchner believes it’s possible, although, he said, the situation in this case is unusual; it does not involve a classic chatbot scenario, but one where the AI-generated statements are published as an ‘AI overview’ of a search query.

“Google’s liability here is based not so much on the fact that it operates the underlying AI, but rather on the publication of its output. However, it seems entirely conceivable to me that this could also be applied generally to inaccurate or defamatory AI,” he pointed out.

Nonetheless, said Carolyn Shelby, head of SEO at Yoast, the German ruling should ensure that companies will be more circumspect in how they handle AI in the future, to protect themselves from any legal action. The first thing they should do  is to separate low-risk use of AI from major decision-making.

“Using AI to summarize meeting notes, brainstorm campaign ideas, or create a first draft of something is very different from using it to make decisions about customers, employees, finance, compliance, health, legal claims, competitive positioning, or public communications,” she noted.

She pointed out that the effects of AI use could be devastating for companies. “The consequences could include customer complaints, reputational damage, regulatory attention, legal claims, correction costs, loss of trust, and internal disruption,” she said. “Even when a mistake does not become a lawsuit, the operational cost of correcting bad information can be significant.”

However, she noted, things may not change immediately.  “Many companies will wait until there is a high-profile court case, regulatory action, or major corporate embarrassment before they take this seriously. That is usually how governance catches up with technology. But the better-run organizations will start treating AI governance as part of normal business risk management now.”

And, said Shahrestani, after the Google decision, everything has changed. It will become more important to ensure that employees remain part of the process.

Years ago, right-wingers coined the phrase “Trump Derangement Syndrome” (TDS) to describe people who hate US President Donald J. Trump. (I think it better describes the president’s outlandish, truth-challenged statements and the followers who think he can do no wrong.) What’s really deranged is his recent AI executive order.

First, a little history. As you may recall, Trump often (and loudly) trashed his predecessor’s Executive Order 14110, which had demanded “safe, secure, and trustworthy” AI. That Biden Administration order was replaced last year by Trump’s own “Removing Barriers to American Leadership in Artificial Intelligence” directive; it basically let US AI companies do whatever they wanted in the name of innovation.

Then, a little thing called Anthropic Mythos came along — and scared the pants off even AI’s biggest fans. Seemingly in response, someone in the federal government decided that letting AI companies do whatever they want might not be the brightest policy. 

Or, did they?

True, the new order creates a process under which AI companies can give US  government access to “covered frontier models” for up to 30 days before public release so experts can probe for vulnerabilities and test how the systems could be abused. It also directs agencies to set evaluation standards, establish an “AI cybersecurity clearinghouse,” and harden federal networks against rapidly advancing AI‑enabled attacks. 

Some people, like Graham Brookie, vice president for technology programs and strategy at the Atlantic Council, think the order is great. “The administration’s executive order on Advanced AI Innovation and Security is a serious policy with support from necessary stakeholders across party lines and industry to ensure the government is evaluating the cybersecurity risks posed by frontier AI models. It’s a policy that can be built on.”

Really? I’m not sure Brookie read the same document I did — if, indeed, he read it at all.

I quote:

“Nothing in this section shall be construed to authorize the creation of a mandatory governmental licensing, preclearance, or permitting requirement for the development, publication, release, or distribution of new AI models, including frontier models.

“In addition, ‘This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.’”

In other words, AI companies won’t be required to do much of anything. And if they do  submit a project for review, get the government’s blessing for it, and something goes badly wrong, it’s not the government’s fault. 

So, exactly why would AI companies even mess with this performative AI security theater?

Beyond those concerns, who exactly will be judging AI projects in 30 days? In theory, it would be a cybersecurity clearinghouse made up of people from the National Security Agency, the US Treasury Department, and the Cybersecurity and Infrastructure Security Agency (CISA). Most likely, CISA would do the bulk of the heavy-lifting — it’s their job, after all. But there’s this wee problem; Trump’s so-called Department of Government Efficiency (DOGE) last year gutted CISA. There’s virtually no one left to do the work, and certainly not in 30 days.

There’s also the question of funding for the new initiative.  According to the order, “The Director of OMB, in coordination with the National Cyber Director and the Director of CISA, shall determine whether any Federal grant programs have available and relevant funding that can be directed toward applicants developing advanced AI vulnerability detection.”

Spoiler: There’s no money set aside for this purpose.

Leaving aside whether the Executive Order has any teeth at all — the Brennan Center for Justice argued that under the Constitution, it doesn’t; the closer you look at the document, the less substance you’ll find.

Besides, in an industry where success is all about releasing the latest Large Language Model (LLM) as fast as possible to garner attention and investor dollars, who exactly would want to put their AI models on ice for even 30 days? (Short answer: No one.) These companies are always going to be focused first on getting the word out about their latest model as fast as humanly — Uh, AI-ly — possible. 

Still, some people seem to think this executive order really will make a difference. For example, Paul Benda, the American Bankers Association executive vice president for risk, fraud, and cybersecurity, sees it “as a constructive step toward strengthening the nation’s approach to managing the cybersecurity risks and opportunities associated with advanced artificial intelligence [because it ] can help better protect critical infrastructure, including the financial sector.”

Oh, please. I’m so tired of people who skim the titles of Trump’s executive orders and then assume there’s anything real about them. 

This AI order is meaningless garbage, and anyone telling you otherwise is either lying or wants to be on the Trump regime’s good (?) side. Or, both — it could always be both. 

The European Commission published its tech sovereignty package last week, including the clearest signal yet of its intention to strengthen European cloud sovereignty and reduce its dependence on US hyperscalers.

It’s a response to growing concerns among European organizations and regulators about the reliance on US tech firms and legislation such as the US CLOUD Act, which could give US officials access to data — even if it is stored in Europe.

But any shift toward local, sovereign cloud providers will necessarily be gradual, analysts, said as the Cloud and AI Development Act (CADA) proposals leave plenty of room for US providers to continue supplying cloud computing services to European public sector customers.

“The direction is right. The execution will be slow,” said Fernando Pereiro, senior director analyst at Gartner.

While the Commission has correctly identified areas where the EU is most dependent on foreign providers, delivering on its ambitions is another challenge, he said. Scaling alternatives to US suppliers “takes time, capital, and coordination at a level that is difficult to sustain in Europe.”

Dario Maisto, senior analyst at Forrester, played down the prospect of a major short-term shift towards European cloud providers as a result of the CADA proposals, even after recent interest in local European vendors for mission-critical workloads and highly sensitive data.

“I do not expect an immediate impact on the cloud infrastructure market,” Maisto said. “Full-blown migrations are costly and take several years. They are not going to happen in the near future.”

Instead, Pereiro expects the gradual emergence of “sovereign enclaves” or controlled environments for sensitive workloads, particularly in government and regulated sectors. “Outside of those areas, the market will remain global, but increasingly shaped by European rules,” he said.

Nevertheless, the three US hyperscalers that account for around 70% of the European cloud market – Amazon Web Services (AWS), Google, and Microsoft —  will likely see a more competitive environment.

“The real shift is symbolic and structural: hyperscalers move from being the default choice to one option among others, and their competitiveness will increasingly depend on how well they align with European control requirements, not just on technology or price,” said Pereiro.

What is CADA and what could it mean for Europe’s cloud market? 

CADA is part of a range of policy and legislative proposals — known as the Tech Sovereignty Package — published by the Commission, alongside Chips Act 2.0, the Open Source Strategy, and Strategic Roadmap for Digitalization and AI in Energy.

CADA includes measures to boost European tech sovereignty. Among other things, it aims to triple data center capacity in the next five to seven years by easing restrictions on new infrastructure projects across the EU, as well as efforts to support research and development of cloud and AI technologies.

It also includes a sovereignty framework that, if enacted, would require EU public bodies to assess sovereignty risks and procure cloud services that meet four assurance levels.

The various levels portray “a political vision with many open questions,” said Maisto. In more detail:

• Level 1 requirements are achievable by hyperscalers, Maisto said, with requirements focused mostly on data residency. 
• Level 2 is “more controversial,” he said, as it includes requirements around third-country access to data and disruption of services.
• Level 3 leaves room for US providers to win procurement contracts — particularly where they enter a joint venture with a European cloud provider such as S3NS, a Thales subsidiary that has partnered with Google.
• Level 4 applies to only a small proportion (1%) of the most sensitive workloads.

The first two levels could be open to US hyperscalers, said Maisto, with 70% of existing EU public sector workloads falling under Level 1 and 20% at Level 2, according to Commission’s own impact assessment. Just 9% of the workloads would require Level 3. 

The most stringent Level 4 would require cloud providers that “have full transparency and control over their software supply chain and no interference from a third country,” the Commission said.

For public sector organizations, the CADA rules could create more clarity around procurement, said Pereiro. “Today, the concept of ‘sovereign cloud’ is often vague and inconsistently applied in providers’ marketing and messaging,” he said. “This package standardizes what sovereignty must look like in practice, effectively ending the era of ‘sovereign washing.’”

The proposals give public sector organizations a “stronger set of requirements with which to assess risk, especially around jurisdiction and access to data,” he said.

“For enterprises, it’s less about regulation and more about leverage,” said Pereiro. “They gain clearer benchmarks and more viable alternatives, particularly through open source and emerging European providers.”

European cloud industry sees ‘a step in the right direction’

The Cloud Infrastructure Services Providers in Europe (CISPE) — a nonprofit trade group — welcomed the “strong definitions” of Levels 3 and 4, and said that, if implemented well, the proposed rules could “help to challenge the commercial dominance of established foreign cloud and AI vendors.”

However CISPE also called the current Level 1 and 2 criteria “confusing and non-sensical,” and said they should not be designated as “sovereign” since US hyperscalers can meet the requirements. “This will continue to confuse the market, both public and private customers, and encourage more sovereignty washing attempts,” CISPE said in a blog post Thursday.

CISPE also said the proposals fail to require public authorities to check whether a European service exists before opting for a foreign supplier. “We see a significant risk that assessments become a ‘rubber-stamp’ exercise that allow IT departments to continue to buy non-sovereign services out of convenience,” the organization said.

French firm OVHcloud — one of the leading European cloud computing and web hosting companies — welcomed the proposals, though it said any rules must be carefully scoped to ensure they are effective.

“This text is a step in the right direction and represents an opportunity to strengthen European strategic autonomy — something unthinkable just a few years ago,” an OVHcloud spokesperson said. “It provides a useful framework, but one that must not leave too much room for exceptions and workarounds. 

“Europe must and can move much faster, with very clear rules and a genuine European preference. Beyond this text, the Commission has demonstrated with its sovereign procurement call that it is possible to act right now to reduce critical dependencies. The time for waiting is over. We must accelerate. We must clarify. We must own it. 

“Europe has the players and the expertise,” the spokesperson said. “It is time to turn political ambition into European industrial capability.”

The overall tech sovereignty package “marks the overdue shift from diagnosis to treatment,” said a spokesperson at Ionos, a German cloud and hosting company. Ionos pointed to the EC’s claims that more than 80% of digital products, services and infrastructures in the EU originate from non-European providers, while 264 billion euros flow from EU organizations into predominantly US-based IT products.

“This is a strategic failure that must now be corrected,” the spokesperson said. While the company applauded the Commission’s focus on “secure and sovereign cloud and AI infrastructure for highly critical use cases,” it argued the CADA proposals fall short. “The central weakness of the package: the approach remains predominantly supply-side. The decisive lever — the demand side – is missing. Public procurement is the most powerful instrument for digital sovereignty. The public sector as anchor customer is critical for scaling sovereign cloud and AI solutions.

“Europe will remain dependent on Nvidia and AMD for GPU computing, the spokesperson said. “What matters is not whether to cooperate, but on what terms: data under European law, operations by European providers, no extraterritorial access. …If EU funding earmarked for ‘sovereign cloud’ ends up with the European subsidiaries of US hyperscalers, the package will have failed its objective.”

The real impact on hyperscalers

The proposed rules could require hyperscalers to change tactics to cater to European customers, or to at least ramp up existing sovereign cloud strategies. “For vendors, this is essentially a shift in what ‘competitive’ means,” said Pereiro. “For the last decade, scale and hyperscaler alignment were enough. That’s no longer the case.”

Cloud providers will need to demonstrate real control over data, infrastructure, and operations, he said, and not just label solutions as “sovereign.”

“The bar has been raised, and some existing offerings simply won’t clear it,” he said.

While the CADA rules are designed to favor European providers in some cases, the proposals stop short of barring US providers from public sector contracts. “It doesn’t shut them out,” said Pereiro, “but it changes competitive conditions substantially.”

The proposed procurement requirements make sovereignty a “gating factor” for sensitive workloads, said Pereiro, and “create real friction for providers whose operating models depend on centralized control or non-EU jurisdiction.”

US tech firms tout support

US hyperscalers publicly welcomed the proposals, and indicated plans to work with policy makers and ensure the importance of customer choice in cloud service procurement.

“We look forward to reviewing the proposed rules and continuing to work alongside our partners to ensure European organizations have the power of choice and sovereign control,” a Google spokesperson said.

An AWS spokesperson said the company has invested ”tens of billions of euros” in European cloud infrastructure, which it claims has “already advanced the continent’s competitiveness, helped organizations innovate and grow, and supported the development and resilience of both public and private services that Europeans now rely on every day.

“European organizations deserve access to the best technology available from trusted providers, chosen on the basis of security, performance, verifiable controls, and value,” the AWS spokesperson said. “We look forward to working with policymakers to ensure the Cloud and AI Development Act promotes technology choice and rewards long-term investment in Europe’s digital future.”

A Microsoft spokesperson said the company shares the EU’s “ambition to strengthen technological sovereignty and global competitiveness in AI, grounded in openness, partnership and fair competition.

“Achieving this will depend on access to world-class infrastructure and technologies at scale,” the Microsoft spokesperson said. “That means enabling European companies and public administrations to make procurement choices based on a broad, risk-based assessment in an open and competitive market.

“Microsoft offers secure and sovereign cloud solutions that put customers in control, and we stand ready to help build a strong, resilient and globally connected AI ecosystem in Europe.”

While the proposals present potential hurdles for US hyperscalers, those that adapt to the new regulatory direction — and concerns of European organizations — will benefit, said Pereiro. “If your offering aligns with sovereignty requirements, your company will be likely to see more opportunities, not fewer,” he said.