16-23 January 2026
HIGHLIGHT OF THE WEEK
WEF 2026 in Davos: Digital governance discussions shift from principles to ‘infrastructure politics’
One of this week’s biggest highlights was the World Economic Forum’s annual meeting in Davos (19–23 January 2026), held under the banner ‘A Spirit of Dialogue.’ But while the headline was dialogue, the subtext was more related to control: who gets to build, run, and police the digital systems the world now treats as essential infrastructure?
Across AI-heavy sessions, the talk has moved beyond hype and into a more complex question: what legitimises large-scale AI rollouts when they draw on scarce resources and concentrate power? Microsoft CEO Satya Nadella argued that this legitimacy is fragile, warning that the public could withdraw its ‘social licence’ for AI’s energy use unless the benefits are clear and widely felt, delivering tangible gains in areas like health and education.
On the corporate side, many business leaders in Davos made the same point: moving from a small AI trial to a tool that runs safely across an entire company is proving much harder than expected. The biggest barriers are often cleaning and connecting data, finding and training the right people, and changing internal workflows so AI outputs are checked, approved, and acted on in a controlled way.
Meanwhile, ‘sovereignty’ surfaced as an engineering and legal puzzle: where can data and compute physically sit, and under whose rules? In the session ‘Digital Embassies for Sovereign AI’, participants argued for a standardised framework, likened to a ‘Vienna Convention’, that would allow countries to use overseas data centre capacity while still asserting control over sensitive datasets and access conditions.
The debates in Davos also exposed a widening fault line in AI policy. Some leaders called for lighter, iterative rules that can evolve ‘at the speed of code‘, while others defended risk-based guardrails and market-wide harmonisation to prevent fragmentation.
In another interesting session called ‘Is Europe’s Tech Sovereignty Feasible? ‘, it was argued that a single framework beats ’27 different’ national regimes, even if the compliance debate remains politically charged.
There were also some discussions on the governance of digital finance. Debates on tokenisation and new payment rails underscored a familiar trade-off: efficiency and innovation versus sovereignty, consumer protection, and systemic risk.
Online harms provided a sharp reminder of what’s at stake when governance fails. In a session focused on fraud, panellists described scam ecosystems that blend online crime with coercion and trafficking, summed up in a stark line: cyber fraud is ‘no longer just about stolen money… it’s about stolen lives.’
Taken together, WEF 2026 provided a roadmap of where the pressure is building: from lofty AI principles toward practical control over infrastructure, accountability, and cross-border rules. The prevailing outcome was a recognition that trust in AI will hinge on demonstrating real-world benefits, integrating human responsibility and oversight into business processes, and resolving sovereignty questions about where data and compute reside. At the same time, the meeting underscored a growing risk of regulatory and geopolitical fragmentation, and a parallel push to strengthen cooperative mechanisms, from harmonised frameworks to multistakeholder forums, to keep security, rights, and resilience from falling behind the speed of deployment.
Diplo live reported from all sessions at the World Economic Forum 2026 in Davos.
IN OTHER NEWS THIS WEEK
This week in AI governance
EU. The EU policymakers are calling for faster AI deployment across the bloc, especially among SMEs and scale-ups, backing the European Commission’s ‘Apply AI Strategy’ and an ‘AI-first’ mindset for business and public services. The European Economic and Social Committee argues the EU’s edge should be ‘trustworthy’ and human-centric AI, but warns that slow implementation, fragmented national approaches, and limited private investment are holding the EU back. Proposed fixes include easier access to funding, lighter administrative burdens, stronger regional ecosystems, investment in skills and procurement, and support for frontier AI to reduce dependence on non-EU models.
USA-California. California Attorney General Rob Bonta has sent a cease and desist letter to Elon Musk’s xAI, ordering it to stop creating and sharing non-consensual sexual deepfakes, following a spike in explicit AI-generated images circulating on X. State officials say Grok enabled the manipulation of images of women and children without consent, potentially violating state decency laws and a newer deepfake-pornography ban. Regulators point to research suggesting Grok users were sharing more non-consensual sexual imagery than users elsewhere. xAI has introduced partial restrictions, though authorities say the real-world impact remains uncertain as investigations continue.
South Korea. New US tariffs on advanced AI-oriented chips are prompting South Korea’s semiconductor industry to assess supply-chain risks and potential trade fallout, with the measure widely interpreted as an attempt to constrain the re-export of AI accelerators to China. The tariff is set at 25% for certain advanced chips imported into the US and then re-exported. It could affect high-end processors that rely on high-bandwidth memory supplied by Samsung Electronics and SK hynix. However, officials argue that much of South Korea’s memory shipments to the US are destined for domestic data centres and may be exempt. Seoul has launched consultations with industry and US counterparts to clarify exposure and ensure that Korean firms receive treatment comparable to that of competitors in Taiwan, Japan, and the EU.
EU. The European Commission has signalled it may escalate action over concerns that Grok-related ‘nudification’ content is spreading on X, with the EU officials stressing that non-consensual sexualised imagery, especially involving minors, is unacceptable. The EU tech chief, Henna Virkkunen, told MEPs that existing EU digital rules provide tools to respond, with enforcement under the Digital Services Act and child-protection priorities. While a formal investigation has not yet been launched, the Commission is examining potential DSA breaches and has reportedly ordered X to retain internal information related to Grok until the end of 2026.
UK. The UK government has appointed two ‘AI Champions’ from industry, Harriet Rees (Starling Bank) and Dr Rohit Dhawan (Lloyds Banking Group), to support safe and effective AI adoption across financial services. The move reflects how mainstream AI already is in the sector (around three-quarters of UK financial firms reportedly use it), alongside official estimates of large potential productivity gains by 2030. The Champions’ remit includes accelerating ‘trusted’ adoption, removing barriers to scale, protecting consumers, and supporting financial stability, linking innovation goals to the sector’s risk-management and supervisory expectations.
Jeff Bezos to enter satellite broadband race
Blue Origin, founded by Jeff Bezos, has announced plans to launch a global satellite internet network called TeraWave in the US. The project aims to deploy more than 5,400 satellites to deliver high-speed data services.
In the US, TeraWave will target data centres, businesses and government users rather than households. Blue Origin says the system could reach speeds of up to 6 terabits per second, exceeding the speeds of current commercial satellite services.
The announcement positions the US company as a direct rival to Starlink, SpaceX’s satellite internet service. Starlink already operates thousands of satellites and focuses heavily on consumer internet access across the US and beyond.
Blue Origin plans to begin launching TeraWave satellites from the US by the end of 2027. The announcement adds to the intensifying competition in satellite communications as demand for global connectivity continues to grow.
Why it matters: At WEF 2026, ‘infrastructure politics’ was shorthand for the power struggle over who builds and governs essential digital systems, and Blue Origin’s TeraWave plan underscores that satellite internet is increasingly treated as strategic infrastructure rather than just a commercial connectivity service.
Child online safety stays on the global agenda as the UK considers an under-16 social media ban
Pressure is growing on Keir Starmer after more than 60 Labour MPs called for a UK ban on social media use for under-16s, arguing that children’s online safety requires firmer regulation instead of voluntary platform measures. The signatories span Labour’s internal divides, including senior parliamentarians and former frontbenchers, signalling broad concern over the impact of social media on young people’s well-being, education and mental health.
Supporters of the proposal point to Australia’s recently implemented ban as a model worth following, suggesting that early evidence could guide UK policy development rather than prolonged inaction.
Starmer is understood to favour a cautious approach, preferring to assess the Australian experience before endorsing legislation, as peers prepare to vote on related measures in the coming days.
Zooming out: Australia’s under-16 social media ban is quickly becoming a reference point in a wider global shift, as more governments weigh age-based restrictions and tougher platform duties, signalling that youth online safety is moving from voluntary safeguards toward hard law.
European Parliament moves to force AI companies to pay news publishers
Lawmakers in the EU are moving closer to forcing technology companies to pay news publishers for the use of journalistic material in model training, according to a draft copyright report circulating in the European Parliament. The text forms part of a broader effort to update copyright enforcement as automated content systems expand across media and information markets.
Compromise amendments also widen the scope beyond payment obligations, bringing AI-generated deepfakes and synthetic manipulation into sharper focus. MEPs argue that existing legal tools fail to offer sufficient protection for publishers, journalists and citizens when automated systems reproduce or distort original reporting.
The report reflects growing concern that platform-driven content extraction undermines the sustainability of professional journalism. Lawmakers are increasingly framing compensation mechanisms as a corrective measure rather than as voluntary licensing or opaque commercial arrangements.
If adopted, the position of the European Parliament would add further regulatory pressure on large technology firms already facing tighter scrutiny under the Digital Markets Act and related digital legislation, reinforcing Europe’s push to assert control over data use, content value and democratic safeguards.
Why it matters: The EU’s push to require payment for journalistic content used in model training is part of a widening global trend, from licensing deals to proposed ‘training-use’ compensation rules, as governments look to rebalance the economics of AI and protect the sustainability of independent newsrooms.
UNESCO raises alarm over government use of internet shutdowns
UNESCO expressed growing concern over the expanding use of internet shutdowns by governments seeking to manage political crises, protests, and electoral periods. Recent data indicate that more than 300 shutdowns have occurred across 54 countries over the past two years, with 2024 the most severe year since 2016.
According to UNESCO, restricting online access undermines the universal right to freedom of expression and weakens citizens’ ability to participate in social, cultural, and political life. Access to information remains essential not only for democratic engagement but also for rights linked to education, assembly, and association, particularly during moments of instability.
Internet disruptions also place significant strain on journalists, media organisations, and public information systems that distribute verified news. Instead of improving public order, shutdowns fracture information flows and contribute to the spread of unverified or harmful content, increasing confusion and mistrust among affected populations.
UNESCO continues to call on governments to adopt policies that strengthen connectivity and digital access rather than imposing barriers. The organisation argues that maintaining open and reliable internet access during crises remains central to protecting democratic rights and safeguarding the integrity of information ecosystems.
Why it matters: As internet shutdowns spread worldwide, especially around protests and elections, they are becoming a default ‘crisis tool’ for states, with mounting costs for rights, public trust, and access to verified information, and growing calls for stronger international accountability.
LOOKING AHEAD
International Submarine Cable Resilience Summit 2026
The International Submarine Cable Resilience Summit 2026 will take place in Porto, Portugal (2–3 February 2026), bringing together governments, regulators, industry, investors, cable operators/experts, and international organisations to strengthen cooperation on protecting the submarine telecom cables that underpin global connectivity.
More info on our dig.watch EVENTS page
READING CORNER
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Greenland-related tensions could trigger the EU retaliation, pushing US tech to lobby for calmer transatlantic relations to protect the EU revenue, cloud/AI growth, and data-flow stability. Read more
OpenAI’s ChatGPT Go launch highlights growing pressure to monetise AI without ads, as investor expectations reshape sustainable business models. Read more