INTRODUCTION Contributed by: George Casey
• the plan to invest EUR109 billion into AI infrastruc- ture in France, announced by President Macron in February 2025 at the AI Action Summit in Paris. The global outpouring of capex into AI and data centre buildouts is mirrored in South-East Asia, where Thai- land is attracting sizeable greenfield development as well as institutional investment in digital infrastructure. In Japan, rapid conversion capacity scaling through strategic asset acquisitions has been the response to escalating construction costs and extended develop- ment timelines. As organisations work towards expanding their digital infrastructure, the challenges they encounter vary sig- nificantly by region and jurisdiction. Companies need to carefully consider multiple factors including data protection regulation, foreign investment controls, local planning restrictions, cybersecurity and the prac- tical need for stable electricity connectivity for certain digital infrastructure, particularly for projects concern- ing data centres and telecommunications towers. New Urgency for Defence Tech Rising global tensions and ongoing conflicts have brought new urgency to enhancing and modernis- ing defence capabilities. This has prompted a step change in government funding, and accelerated investment in defence technology start-ups that are developing technologies such as AI-powered drones, autonomous vehicles and advanced software-enabled weapon systems. For example, the US government has made a strategic pivot towards more agile, adaptable and technology- driven combat solutions. It has significantly increased its budget for unmanned systems and counter-drone technology, allocating approximately USD6 billion for the 2026 fiscal year. Venture capital and private equity investment in defence tech has also reached record highs, which in the USA has far exceeded state spending, amounting to USD38 billion in the first half of 2025. The EU is also prioritising investments in defence tech; it announced project ReArm Europe and Readiness 2030 in March 2025, which marks the first co-ordinated EU initiative to significantly boost defence expenditure. The programme aims to increase the EU’s defence spending by an estimated
EUR800 billion by April 2029. The majority (over 60%) of the spending is dedicated to AI, surveillance, recon- naissance and advanced analytics. Space technologies have also attracted growing inter- est across numerous jurisdictions due to the strategic significance of space in national defence strategies. This encompasses launch vehicle technologies, com- munication networks, digital infrastructure, and other essential systems required for effective space opera- tions. Relatedly, the development of radiation-resist- ant microchips in the UK for deployment in higher orbits is revolutionising space technology. As interest in defence tech grows, investment in dual- use technologies serving both commercial and nation- al customers is expected to accelerate. Countries such as the Netherlands are seeing strong momen- tum in the collaboration between EU governments and institutional investors to target investments in defence and dual-use technology. However, the sec- tor presents complex legal challenges, especially as AI becomes more embedded in military systems. Key issues include compliance with international humani- tarian law, human oversight of autonomous systems, transparency in classified technologies, and strict export controls and national security reviews. While ethical governance frameworks are emerging globally, binding legal standards remain fragmented and under development. Complex and Fragmenting Global Regulatory Landscape As deal making in the technology industry has become increasingly more global, and with technology often being viewed as a strategic, defence and national security priority, regulators in different jurisdictions have been tightening requirements in their markets. Antitrust authorities have been challenging technol- ogy transactions more aggressively (even challeng- ing perceived dominance of tech companies in a par- ticular market), while foreign direct investment (FDI) regulations have been tightened in different parts of the world to protect nascent technologies from being acquired by foreign buyers. For example, foreign investment regulators have been scrutinising the scope for data centres to provide hos-
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