US tells diplomats to lobby against foreign data sovereignty laws | TechCrunch

TechCrunch

by Rebecca Bellan

February 25, 2026

AI-Generated Deep Dive Summary

The Trump administration has directed U.S. diplomats to actively oppose foreign countries' efforts to regulate how American technology companies handle personal data, according to an internal diplomatic cable obtained by Reuters. The cable, signed by Secretary of State Marco Rubio, argues that such regulations—often referred to as data sovereignty laws—pose significant threats to the advancement of artificial intelligence (AI) services and global tech innovation. It warns that these laws could disrupt international data flows, increase costs and cybersecurity risks, limit access to AI and cloud technologies, and expand government control over data in ways that could undermine civil liberties and enable censorship. The directive tasks diplomats with countering "unnecessarily burdensome" regulations, such as data localization mandates, which require companies to store data within specific geographic regions. It also urges them to monitor and oppose proposals aimed at promoting data sovereignty laws while advocating for the Global Cross-Border Privacy Rules Forum, an international initiative that aims to facilitate trusted global data flows through standardized privacy certifications. This push comes amid growing global scrutiny of how major tech companies and AI firms handle user data. The move reflects the Trump administration's broader stance against stringent regulatory approaches, particularly those akin to the European Union's General Data Protection Regulation (GDPR) and other measures like the Digital Services Act and the AI Act. These EU-led initiatives aim to curtail the power of tech giants and ensure accountability for how they use personal data. The U.S., however, appears intent on maintaining a more permissive environment to bolster its AI companies' competitiveness on the global stage. This issue is particularly relevant to readers interested in tech policy, as it underscores the ongoing debate over data regulation, privacy rights, and the future of AI innovation. While some argue that stricter regulations are necessary to protect user privacy and prevent monopolistic practices by dominant tech firms, others contend that such measures could stifle innovation and hinder the growth of global tech ecosystems. The U.S. position highlights the tension between

Verticals

techstartups

Originally published on TechCrunch on 2/25/2026