A leaked State Department cable — signed by Secretary of State Marco Rubio and obtained by Reuters — reveals that the Trump administration has formally ordered U.S. diplomats around the world to lobby foreign governments against data sovereignty and data localization laws. The directive frames the global push to regulate how American tech companies handle foreign citizens' data as a direct threat to AI advancement, national security, and the free internet itself. The implications are sweeping: Washington has placed itself squarely on one side of the most consequential regulatory battle in tech history.
The Rubio Cable: What It Actually Says
The classified State Department cable, dated February 18, 2026, describes an "action request" — diplomatic shorthand for a mandatory order rather than a suggestion. Ambassadors and consular officials are instructed to actively track, oppose, and lobby against any foreign legislation that would restrict cross-border data flows, impose data localization mandates, or otherwise limit how U.S. tech companies collect and process data from foreign nationals.
The cable is remarkably candid about the rationale. Data sovereignty laws, it warns, "would disrupt global data flows, increase costs and cybersecurity risks, limit Artificial Intelligence (AI) and cloud services, and expand government control in ways that can undermine civil liberties and enable censorship." It specifically calls out GDPR — the European Union's landmark 2018 privacy regulation — as an example of "unnecessarily burdensome data processing restrictions."
Diplomats are also tasked with promoting the Global Cross-Border Privacy Rules (CBPR) Forum, a U.S.-led initiative established in 2022 with partners including Canada, Japan, Australia, and Mexico. The forum positions itself as an alternative international privacy framework — one that emphasizes free data flows over strict localization requirements.
"Where the previous administration attempted to woo European customers, the current one is demanding that Europeans disregard their own data privacy regulations that could hinder American business." — Bert Hubert, Dutch cloud computing expert
Why Data Sovereignty Is an AI Story
To understand why the Trump White House is mobilizing the entire diplomatic corps around data regulation, you need to understand what data means for AI companies in 2026.
The most powerful AI models — the large language models, multimodal reasoning systems, and next-generation agentic frameworks being built by OpenAI, Google DeepMind, Anthropic, Meta, and others — require training on vast quantities of real-world human data. Text, images, medical records, behavioral patterns, browsing history, social media interactions: the richer and more diverse the data, the more capable the model.
Data localization laws directly threaten this engine. When a country requires that data generated by its citizens be stored and processed within its borders, American AI companies face two bad options: either build out expensive local infrastructure (which fragments their data pools), or exit the market entirely. Either way, they get less data. Less data means less competitive AI.
The Trump administration — which has made "winning the AI race against China" a cornerstone of its technology policy — clearly views any constraint on U.S. AI companies' data access as a strategic liability. The Rubio cable is essentially an economic and technological competitiveness document dressed up in diplomatic language.
Europe's Perspective: Safety vs. Surveillance
The European Union's response to this geopolitical dynamic has been to accelerate, not retreat. Over the past several months, a cascade of European nations have moved to crack down on major U.S. tech platforms. Spain ordered prosecutors to investigate Meta, X, and TikTok for spreading AI-generated child sexual abuse material. Ireland's Data Protection Commission opened a formal probe into Grok's processing of personal data. France, Denmark, Slovenia, and others are advancing social media bans for minors.
These moves reflect something deeper than bureaucratic friction — they represent a genuine philosophical divergence. European regulators see unconstrained data collection as a surveillance risk, a democratic vulnerability, and a tool of foreign influence. The EU AI Act, which began its phased rollout in 2024, takes an explicitly risk-based approach: AI systems used in high-stakes contexts (employment, credit, policing) face strict transparency and human oversight requirements.
The GDPR, meanwhile, has quietly become one of the most consequential pieces of technology legislation in history — generating billions in fines against American tech firms and fundamentally reshaping how companies handle European user data globally. Rubio's cable labeling GDPR as "unnecessarily burdensome" is unlikely to go over well in Brussels.
French President Emmanuel Macron has called U.S. resistance to European digital regulation a "geopolitical battle." Spain's Consumer Rights Minister Pablo Bustinduy has framed his country's tech crackdown as an attempt to "break free from digital dependence on the United States." These aren't fringe positions — they reflect growing mainstream sentiment across the continent.
The China Dimension
The Rubio cable doesn't just target Europe. It also specifically cites China, warning that Beijing is "bundling enticing technology infrastructure projects with restrictive data policies that expand its global influence and access to international data for surveillance and strategic leverage." This framing positions data sovereignty as a tool of Chinese authoritarianism — and by implication, suggests that European-style data localization laws are playing into Beijing's hands.
It's a clever rhetorical move, though European officials are likely to reject it. The EU has consistently argued that its data protection framework is about democratic accountability, not state surveillance. And China's data policies, which serve a fundamentally different political system, don't translate cleanly to the European context.
Still, the China framing reflects a real strategic concern. If the global internet splinters into competing regulatory blocs — a U.S. sphere, an EU sphere, and a Chinese sphere — American AI companies lose scale advantages that currently make them world-class. A fragmented data landscape is, from Washington's perspective, a gift to Beijing.
What This Means for the AI Industry
For U.S. tech companies, the Rubio cable is welcome news in the short term. Having the full weight of American diplomatic power behind your position in regulatory battles with foreign governments is a significant advantage. Companies like OpenAI, Google, Microsoft, and Meta have been navigating increasingly hostile regulatory environments in Europe and elsewhere — now they have allies in every embassy.
But the longer-term dynamics are more complicated. European regulators are unlikely to be deterred by diplomatic lobbying. The EU has demonstrated repeatedly that it will enforce its digital laws even under significant American pressure. And the cable may actually harden European positions — nothing accelerates political will like the perception that a foreign power is trying to override your laws.
There's also the question of what this means for AI governance globally. The Trump administration's approach — frame regulation as censorship, position free data flows as a civil liberties issue, promote a U.S.-led international privacy forum as the alternative to GDPR — is a coherent strategy. But it's one that explicitly rejects binding international cooperation on AI safety and accountability in favor of U.S. industry-led norms.
That's a significant departure from where the Biden administration was heading, and from where the EU, UK, and most democratic governments want to go. The AI governance landscape in 2026 increasingly looks like a fork in the road: one path toward internationally negotiated guardrails with meaningful enforcement, another toward U.S. industry self-regulation backed by diplomatic muscle.
The State Laws in the Crossfire
The geopolitical battle over data sovereignty has a domestic counterpart. Within the United States, a growing number of states have passed their own AI and data privacy laws — often specifically designed to fill the vacuum left by federal inaction. Colorado's SB 24-205, the Colorado AI Act, requires developers of high-risk AI systems to exercise "reasonable care" to protect consumers from algorithmic discrimination. It was delayed from February 2026 to June 2026, in part due to an executive order from the Trump administration that was widely interpreted as signaling federal opposition to state-level AI regulation.
Illinois' amendment to the Human Rights Act prohibits employers from using AI in ways that discriminate against protected classes. California's Privacy Rights Act (CPRA) has become a de facto national data standard for companies that operate there. These aren't fringe laws — they're serious, well-crafted pieces of legislation that reflect genuine constituent concerns.
The Trump administration's posture — opposing both foreign data sovereignty laws and state-level AI regulations — points toward a clear endgame: maximum flexibility for American AI companies to operate without binding constraints on data collection or algorithmic decision-making. Whether that's the right policy for long-term AI development is a question that's actively being contested in legislatures, courtrooms, and diplomatic cables around the world.
The Road Ahead: A Fractured Landscape
The Rubio cable is a symptom of a larger structural shift: the age of relatively harmonized global internet governance is over. What's replacing it is messier, more contested, and ultimately more consequential for how AI develops over the next decade.
American AI companies will continue to thrive in jurisdictions that adopt the U.S. model of light-touch regulation and free data flows. They'll face growing friction in Europe, and increasingly in countries like India, Brazil, and Indonesia that are developing their own data sovereignty frameworks. The question is whether that friction will slow AI development or merely reroute it.
For the broader tech industry, the most important near-term question isn't whether GDPR survives Rubio's lobbying efforts (it will). It's whether the U.S. and EU can find enough common ground to avoid a full regulatory decoupling — or whether the digital world is heading toward a permanent split, with American AI on one side, European-regulated AI on the other, and everyone else choosing sides.
If Washington's diplomatic offensive succeeds in softening data sovereignty laws in smaller markets while failing in Europe, U.S. companies may find themselves with a two-tier international posture: unrestricted data access in compliant markets, heavily constrained operations in Europe. That's manageable in the short run. Over time, as Europe becomes the regulatory template for democratic nations globally, it could become an increasingly uncomfortable constraint on American AI ambitions.
