sovereignty

The Trump administration has directed U.S. diplomats to actively oppose foreign laws that restrict how American tech companies handle citizens’ data abroad. An internal State Department cable, dated February 18 and signed by Secretary of State Marco Rubio, described such measures as threats to artificial intelligence services, global data flows, and civil liberties.

Experts say the move signals a return to a more confrontational approach after previous efforts focused on building goodwill with European customers. The administration warned that data sovereignty rules could increase costs, introduce cybersecurity risks, and expand government control in ways that enable censorship.

Data Sovereignty in Focus

Data sovereignty or localization initiatives have accelerated, especially in Europe, amid ongoing tensions over U.S. trade policies and concerns about privacy and surveillance. European regulators, wary of American tech giants, have tightened rules on how data is stored and shared. The EU’s General Data Protection Regulation (GDPR) remains the most prominent example, restricting cross-border data transfers and imposing stiff fines on companies that fail to comply.

The State Department cable cited GDPR as “unnecessarily burdensome” and highlighted China’s restrictive data policies as an example of how technology rules can expand geopolitical influence. Beijing, it noted, bundles infrastructure projects with policies that provide access to international data for surveillance and strategic leverage.

Diplomatic Action Plan

The cable, labeled as an “action request,” instructed diplomats to track proposals that could limit cross-border data flows and to counter regulations deemed excessive. Talking points included promotion of the Global Cross-Border Privacy Rules Forum, a multinational initiative launched in 2022 by the United States, Mexico, Canada, Australia, and Japan to support free flow of data while ensuring privacy protections.

This directive follows a pattern of U.S. opposition to European digital regulation. Last year, diplomats were ordered to challenge the EU’s Digital Services Act, aimed at making the internet safer by forcing social media firms to remove illegal content. The U.S. is also reportedly planning an online portal to help users bypass content moderation, including restrictions on material flagged as hate speech or terrorist propaganda.

Analysis: A More Assertive U.S. Digital Strategy

The cable reflects a strategic shift toward actively protecting the interests of U.S. tech companies globally. While previous administrations attempted to engage Europe diplomatically, the current approach pressures foreign governments to loosen privacy and data storage regulations that could hinder U.S. business.

By framing data sovereignty laws as a threat to AI development, cybersecurity, and civil liberties, the administration is positioning the free flow of data as a cornerstone of U.S. economic and technological influence. At the same time, rising competition from China in digital infrastructure and AI adds urgency, highlighting the geopolitical stakes of controlling international data flows.

The broader implication is a growing clash between national data policies and global digital commerce. As countries enact stricter rules to protect citizens’ data, U.S. tech firms and policymakers are increasingly asserting that global interoperability and AI innovation must take priority, signaling potential tensions in transatlantic and international digital governance for years to come.

With information from Reuters.

Natalia Burdynska Schuurman defended her MsC thesis at the University of Edinburgh on Venezuela’s struggle for food security and food sovereignty amid wide-reaching US-led unilateral sanctions.

See below for the abstract, research questions, and the full text.

Abstract

As global development actors grapple with mounting pressures to feed the world population, growing enforcement of unilateral coercive measures jeopardizes efforts to advance Sustainable Development Goal 2 (SDG-2, “Zero Hunger”). This dissertation examines efforts to achieve food security in Venezuela, a state currently targeted by over 1,000 unilateral coercive measures, since its incorporation as a constitutional right in 1999 and how such processes have been shaped by economic sanctions targeting its oil industry introduced by the United States in 2015. It employs a literature review, secondary data analysis and archival research, adopting a political economy and world systems lens as well as a historical, relational and interactive approach to food sovereignty research, centering the perspectives and experiences of Venezuelan communities. This dissertation argues that unilateral sanctions targeting Venezuela’s oil industry triggered the collapse of a political economy of food security structurally dependent on Venezuela’s macroeconomic stability within a dollarized international trade and financial system, catalyzing efforts to rebuild Venezuela’s food and agricultural system that transformed the landscape of national food sovereignty construction. It is hoped that this dissertation yields new insights into challenges and prospects facing national efforts to construct food sovereignty and global efforts to achieve food security today.

[…]

Research questions

This dissertation answers the primary question: How have unilateral sanctions
targeting Venezuela’s oil industry shaped efforts to achieve food security in
Venezuela?

It addresses the following contributory questions: What was the state of affairs characterizing Venezuela’s food and agricultural system prior to 2015? What advances and setbacks have been identified concerning the national goal to achieve food security, as enshrined in Venezuela’s Constitution of 1999? How have financial and trade sanctions targeting Venezuela’s oil industry introduced by the United States in 2015 correlated with macroeconomic and food security trends in Venezuela? How have financial and trade sanctions targeting Venezuela’s oil industry impacted food production, distribution and access in Venezuela? How have state and societal actors engaged in efforts to achieve food security in Venezuela responded to these consequences?

Several Big Tech companies have reported earnings in recent weeks and provided estimates for their spending in 2026, along with leading analysts’ projections.

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The data point that seems to have caught Wall Street’s attention the most is the estimated capital expenditure (CapEx) for this year, which collectively represents an investment of over $700bn (€590bn) in AI infrastructure.

That is more than the entire nominal GDP of Sweden for 2025, one of Europe’s largest economies, as per IMF estimates.

Global chip sales are also projected to reach $1tn (€842bn) for the first time this year, according to the US Semiconductor Industry Association.

In addition, major banks and consulting firms, such as JPMorgan Chase and McKinsey, project that total AI CapEx will surpass $5tn (€4.2tn) by 2030, driven by “astronomical demand” for compute.

CapEx refers to funds a company spends to build, improve or maintain long-term assets like property, equipment and technology. These investments are meant to boost the firm’s capacity and efficiency over several years.

The expenditure is also not fully deducted in the same year. CapEx costs are capitalised on the balance sheet and gradually expensed through depreciation, representing a key indicator of how a company is investing in its future growth and operational strength.

The leap this year confirms a definitive pivot that began in 2025, when Big Tech is estimated to have spent around $400bn (€337bn) on AI CapEx.

As Nvidia founder and CEO Jensen Huang has repeatedly stated, including at the World Economic Forum in Davos last month, we are witnessing “the largest infrastructure build-out in human history”.

Hyperscalers bet the house

At the top of the spending hierarchy for 2026 sits Amazon, which alone is guiding to invest a mammoth $200bn (€170bn).

To put the number into perspective, the company’s individual AI CapEx guidance for this year surpasses the combined nominal GDP of the three Baltic countries in 2025, according to IMF projections.

Alphabet, Google’s parent company, follows with $185bn (€155bn), while Microsoft and Meta are set to deploy $145bn (€122bn) and $135bn (€113bn) respectively.

Oracle also raised its 2026 CapEx to $50bn (€42.1bn), nearly $15bn (€12.6bn) above earlier estimates.

Additionally, Tesla projects double the spending with almost $20bn (€16.8bn), primarily to scale its robotaxi fleet and advance the development of the Optimus humanoid robot.

Another of Elon Musk’s companies, xAI, will also spend at least $30bn (€25.2bn) in 2026.

A new $20bn (€16.8bn) data centre named MACROHARDRR will be built in Mississippi, which Governor Tate Reeves stated is “the largest private sector investment in the state’s history”.

xAI will also expand the so-called Colossus, a cluster of data centres in Tennessee that has been described by Musk as the world’s largest AI supercomputer.

Furthermore, the company was acquired by SpaceX in an all-stock transaction at the start of this month.

The merger valued SpaceX at $1tn (€842bn) and xAI at $250bn (€210bn), creating an entity worth $1.25tn (€1.05tn), reputedly the largest private company by valuation in history.

There are also reports that SpaceX intends to IPO sometime this year, with Morgan Stanley allegedly in talks to manage the offering that now includes exposure to xAI.

Elon Musk stated that the goal is to build an “integrated innovation engine” combining AI, rockets and satellite internet, with long-term plans that include space-based data centres powered by solar energy.

Conversely, Apple continues to lag in spending with “only” a projected $13bn (€10.9bn).

However, the company announced a multi-year partnership with Google last month to integrate Gemini AI models into the next generation of Apple Intelligence.

Specifically, the collaboration will focus on overhauling Siri and enhancing on-device AI features. Therefore, one could say that Apple is outsourcing a lot of the investment it needs to be competitive on AI development.

As for Nvidia, it will report earnings and release projections on 25 February.

The company is primarily in the business of selling AI chips, and is expected to get the lion’s share of the Big Tech’s spending. Particularly, for the build-out of data centres.

In last August’s earnings call, CEO Jensen Huang estimated a cost per gigawatt of data centre capacity between $50bn (€42.1bn) and $60bn (€50.5bn), with about $35bn (€29.5bn) of each investment going towards Nvidia hardware.

The great capital rotation

Wall Street has had mixed feelings about the enormous spending Big Tech companies have planned for 2026.

On the one hand, investors understand the necessity and urgency of developing a competitive edge in the artificial intelligence age.

On the other, the sheer scale of the spending has also spooked some shareholders. The market’s tolerance hinges on demonstrable ROI from this year onwards, as the investments are also increasingly financed with massive debt raises.

Morgan Stanley estimates that hyperscalers will borrow around $400bn (€337bn) in 2026, more than double the $165bn (€139bn) that was loaned out in 2025.

This surge could push the total issuance of high-grade US corporate bonds to a record $2.25tn (€1.9tn) this year.

Currently, projected AI revenue for 2026 is nowhere near matching the spending, and there are valid concerns. For instance, the possibility of hardware rapidly depreciating due to innovation, and other high operational costs such as energy usage.

It can be confidently stated that the numbers have a heavy reliance on future success.

As Google CEO Sundar Pichai acknowledged this month, there are “elements of irrationality in the current spending pace”.

Back in November, Alex Haissl, an analyst at Rothschild & Co, became a dissenting voice as he downgraded ratings for Amazon and Microsoft.

In a note to clients, the analyst wrote “investors are valuing Amazon and Microsoft’s CapEx plans as if cloud-1.0 economics still applied”, referring to the low-cost structure of cloud-based services that allowed Big Tech firms to scale in the last two decades.

However, the analyst added “there are a few problems that suggest the AI boom likely won’t play out in the same way, and it is probably far more costly than investors realise”.

This view is also shared by Michael Burry, who is best known for being among the first investors to predict and profit from the subprime mortgage crisis in 2008. Burry has argued that the current AI boom is a potential bubble pointing to unsustainable CapEx.

Big Tech’s AI race is funded by a tremendous amount of leverage. Whether this strategy will pay off, and which companies will be the winners and the losers, only time will tell.

At the moment, Nvidia certainly seems to be a great beneficiary. Moreover, Apple has a distinct approach by increasing third party reliance, through a partnership with Google, instead of massively scaling their spending. It is a different trade-off.

Europe’s industrial deficit

Amid all this spending, urgent questions have also been raised about Europe’s ability to compete in a race that has become a battle of balance sheets.

For the European Union, the transatlantic contrast is sobering. While American firms are mobilising nearly €600bn in a single year, the EU’s coordinated efforts do not even match the financial firepower of the lowest spender among the US tech titans.

Brussels has attempted to rally with the AI Factories initiative, and the AI Continent Action Plan launched last April, which aim to mobilise public-private investments.

However, the numbers tell a stark story. Total European spending on sovereign cloud data infrastructure is forecast to reach just €10.6bn in 2026.

While this is a respectable 83% increase year-on-year, it remains a rounding error compared to the US AI build-out.

Last year, at the time when the initiatives mentioned were being discussed, the CEO of the French unicorn Mistral AI, Arthur Mensch, stated that “US companies are building the equivalent of a new Apollo program every year”.

Mensch also added that “Europe is building excellent regulation with the AI Act, but you cannot regulate your way to computing supremacy”.

Mistral represents one of the only flickers of European resistance in the AI race. The French company is employing the same strategy as most of Big Tech and aggressively expanding its physical footprint.

In September 2025, Mistral AI raised a €1.7bn Series C at a valuation of almost €12bn, with the Dutch semiconductor giant ASML leading the round by singly investing €1.3bn.

During the World Economic Forum in Davos last month, Mistral’s CEO confirmed a €1bn CapEx plan for 2026.

Just last week, the company also announced a major €1.2bn investment to build a data centre in Borlänge, Sweden.

In a partnership with the Swedish operator, EcoDataCenter, the facility will be designed to offer “sovereign compute” compliant with the EU’s strict data standards, and leveraging Sweden’s abundant green energy.

Set to open in 2027, this data centre will provide the high-performance computing required to train and deploy Mistral’s next-generation AI models.

This is an important move for the company, as it is the first infrastructure project outside France, and it is also a core venture for European data sovereignty.

Meanwhile, US tech titans are attempting to placate European regulators by offering “sovereign-light” solutions. Several Big Tech projects have been rolled out for “localised cloud zones”, for example in Germany and Portugal, promising data residency.

However, critics argue these remain technically dependent on US parent companies, leaving the European industry vulnerable to the whims of the American economy and foreign policy.

As 2026 unfolds, the stakes are clear. The US is betting the house, and its credit rating, on AI dominance.

Europe, cautious and capital-constrained, is hoping that targeted investments and regulation will be enough to carve out a sovereign niche in a world increasingly run on American technology.

With astonishing speed amid so many postponed emergencies, the reform of the Organic Law on Hydrocarbons, enacted in 2006 by President Hugo Rafael Chávez Frías, has been approved. Amending the work of such a towering figure requires prudence and restraint. Let us examine the result.

First of all, what stands out is the unconstitutional attempt to repeal Article 151 of the Constitution of the Bolivarian Republic through Article 8 of a simple law, which proposes:

Article 8. Any doubts or disputes of any nature that may arise in connection with the activities covered by this Law and that cannot be resolved amicably by the parties may be decided by the competent courts of the Republic or through alternative dispute resolution mechanisms, including mediation and independent arbitration.

This article directly contradicts Article 151 of the Venezuelan Constitution:

Article 151. In the public interest contracts, unless inapplicable by reason of the nature of such contracts, a clause shall be deemed included even if not expressed, whereby any doubts and controversies which may raise concerning such contracts and which cannot be resolved amicably by the contracting parties, shall be decided by the competent courts of the Republic, in accordance with its laws and shall not on any grounds or for any reason give rise to foreign claims.

There is no doubt that the Constitution of the Republic is the Supreme Law of the Nation and therefore cannot be repealed by a lesser legal norm. Contracts on hydrocarbons are in the public interest, as Article 12 of our Constitution considers them to be “public domain assets”:

Article 12. Mineral and hydrocarbon deposits of any nature that exist within the territory of the nation, beneath the territorial sea bed, within the exclusive economic zone and on the continental sheaf, are the property of the Republic, are of public domain, and therefore inalienable and not transferable. The seacoasts are public domain property.

Articles 103, 126, paragraph 12, and 136, paragraphs 8 and 10, as well as Article 156, paragraphs 12 and 16 of the Constitution assign the same classification of public interest and public domain to mines and hydrocarbons.

This is a harmonious development of what Article 1 of our Constitution considers “Fundamental Principles”: immunity, the sovereign power not to be subject to foreign courts or jurisdictional bodies to decide disputes of internal public interest: “The Bolivarian Republic of Venezuela is irrevocably free and independent, basing its moral property and values of freedom, equality, justice and international peace on the doctrine of Simón Bolívar, the Liberator. Independence, liberty, sovereignty, immunity, territorial integrity and national self-determination are unrenounceable rights of the Nation.”

These are not mere abstract principles. Sovereignty is the absolute and perpetual power of a political body to make its own laws, enforce them, and resolve for itself any disputes that may arise from their application. A state that loses any of these powers ceases to be sovereign and independent. This is what happens when we agree to resolve disputes over internal public interest issues not through our courts and laws, but “through alternative dispute resolution mechanisms, including mediation and independent arbitration.” Precisely because we handed over the resolution of the dispute concerning our sovereignty over Guayana Esequiba to “independent arbitration” [in 1899], that territory was taken from us.

Venezuela has systematically lost almost all disputes on matters of public interest brought before foreign bodies, which is why we withdrew from the infamous ICSID (International Centre for Settlement of Investment Disputes, part of the World Bank) and the Inter-American Court of Human Rights (IACHR, part of the OAS).

In short, if we allow external courts to decide on matters of public interest, how can we oppose foreign courts also judging our legitimate President Nicolás Maduro Moros and his wife, Congresswoman Cilia Flores, according to foreign laws?

The law we are examining includes numerous other objectionable proposals. Among them, Article 34 establishes that the creation of joint ventures and their operating conditions require only the mere “notification” of the National Assembly, which has no decision-making powers in matters so fundamental to the interests of the nation.

Articles 35, 36, 37, 38, and 40 [of the reform] progressively grant joint ventures and minority partners authority for the extraction, management, and commercialization of hydrocarbons, which Article 302 of our Constitution reserves for the Republic:

Article 302. The State reserves to itself, through the pertinent organic law, and for reasons of national expediency, the petroleum industry and other industries, operations and goods and services which are in the public interest and of a strategic nature. The State shall promote the domestic manufacture of raw materials deriving from the exploitation of nonrenewable natural resources, with a view to assimilating, creating and inventing technologies, generating employment and economic growth and creating wealth and wellbeing for the people.

Article 41 of the aforementioned law authorizes private companies to carry out the “integrated management” of exploitation, receiving crude oil as payment, which displaces PDVSA and the State from their decisive functions in the industry, as set forth in the aforementioned Article 302 of our Constitution.

Article 52 of the recently approved reform empowers the executive branch to reduce the amount of royalties at will when it is demonstrated “to its satisfaction” that the project’s economic needs justify it. It should be noted that the previous [2006] law allowed the nation to receive between 60% and 65% in royalties and taxes, while the provisions of the recently amended law allow multinationals to reduce this contribution to below 15%, depending on the category of assets and activity. This represents a significant reduction in public revenue from this source of up to 50% in favor of private operators, almost all of which are foreign.

Article 56 of the recently amended law defines a 15% “integrated hydrocarbon tax” but the executive is also allowed to reduce it at its discretion. Ultimately the national fiscal share can go down from 65% to 25%.

On the sensitive issue of royalties, Andrés Giuseppe noted in a study dated January 28, 2026 (Poli-data.com): 

This report thoroughly analyzes the premise that royalties, as compensation for the depletion of a non-renewable asset, should be inalienable and non-negotiable, and argues that any incentives for the industry should be limited to the scope of taxes on profits and not to the owner’s gross share. (…) The transition from the current legal framework to the 2026 proposal represents a significant change in the protection of oil revenues. While the [2006] law strictly limits the conditions under which payments to the State can be reduced, the reform expands the discretion of the National Executive. The 2026 reform introduces greater flexibility that, in practice, weakens the concept of royalties as a “floor” for state participation. Under the 2006 law, the reduction to 20% was restricted to specific fields with proven geological difficulties; in contrast, the new Article 52 allows the National Executive to reduce the royalty at its discretion for any project, provided that the lack of economic viability is demonstrated “to its satisfaction” (,,,) The oil royalty, historically linked to jus regale, represents the compensation that the exploiter of a non-renewable natural resource owes to the State for the right to extract and appropriate an asset that belongs to the public domain. In Venezuelan doctrine, this concept is based on Article 12 of the Constitution of the Bolivarian Republic of Venezuela, which establishes that hydrocarbon deposits are public property, inalienable, and imprescriptible.

The royalty, therefore, is non-negotiable and cannot be diverted from its spirit, purpose, and rationale to satisfy other legal obligations arising from different causes and motivations. Furthermore, the Organic Law on National Public Finance establishes: “Article 5. Under no circumstances is compensation against the Treasury admissible, regardless of the origin and nature of the credits to be compensated.” 

Compensation is an institution of private law whereby an individual can extinguish a debt with another individual by offsetting it against a debt that he or she has with that individual. As we can see, the Organic Law on National Public Finance itself, which has specific jurisdiction in tax matters, categorically prohibits it, which means that a citizen cannot cancel the payment of royalties on the grounds that he or she used that debt to satisfy another obligation.

In summary, numerous provisions of the recently reformed Organic Law on Hydrocarbons tend to diminish the Republic’s exclusive jurisdiction over hydrocarbon exploitation, enabling a gradual privatization of the industry. Other provisions make significant reductions in public revenue dependent on the discretion of officials, which do not take into account the real value of the hydrocarbons extracted but rather the alleged economic situation of the private company involved in the project. The overal result will be to significantly reduce the revenue generated by these resources, jeopardizing the financial management of state oil company PDVSA and that of the Republic itself.

Translated and with minor edits by Venezuelanalysis.

The views expressed in this article are the author’s own and do not necessarily reflect those of the Venezuelanalysis editorial staff.

Source: Luis Britto García