NBA Commissioner Adam Silver speaks during a news conference following a meeting of the NBA’s board of governors at the Thomas & Mack Center in Las Vegas, July 15, 2025.

Chase Stevens | Las Vegas Review-journal | Getty Images

The NBA is looking to Europe for its next stage of growth.

The league announced on Monday that it will move forward with a joint exploration of a new professional men’s league in Europe, in partnership with the International Basketball Federation, also called FIBA. The NBA said it plans to start the process of engaging with prospective teams and ownership groups in January.

Franchise values could be upward of a $1 billion, according to a person familiar with the matter who requested anonymity to speak about details that haven’t been made public yet.

At the NBA Cup last week in Las Vegas, NBA Commissioner Adam Silver said JPMorgan and the Raine Group have been actively meeting with interested parties in Europe and that there is a lot of “positive interest” in moving forward.

The bankers have met with at least 70 potential investors, sources told CNBC. Discussions began about a year and a half ago. The goal is to take nonbinding bids next month and vote on green-lighting the league at the board of governors meeting in March, sources said.

NBA Deputy Commissioner Mark Tatum has said previously that the league is contemplating potential ownership by sovereign wealth funds. The NBA is also engaging current European soccer club owners.

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The league first announced the exploration of a men’s basketball league in Europe last March.

“Our conversations with various stakeholders in Europe have reinforced our belief that an enormous opportunity exists around the creation of a new league on the continent,” Silver said in a release Monday. “Together with FIBA, we look forward to engaging prospective clubs and ownership groups that share our vision for the game’s potential in Europe.”

The NBA said it will also provide financial support and resources to European basketball. It plans to invest in domestic leagues and development across FIBA’s existing programs to create a pipeline of coaches, players and referees, according to the Monday release.

The NBA estimates there are 270 million potential basketball fans in Europe, calling it an “untapped market.” This year, on opening night, the NBA had 71 European-born players. Some of league’s biggest stars — Victor Wembanyama, Giannis Antetokounmpo, Nikola Jokić and Luka Dončić — hail from Europe.

Victor Wembanyama of the San Antonio Spurs celebrates after a 131-121 victory against the Washington Wizards at Capital One Arena in Washington, Feb. 10, 2025.

Greg Fiume | Getty Images

The NBA said basketball is the fastest-growing sport in Europe and the No. 2 sport behind only soccer. The league said the timing is perfect, as last season was the NBA’s most watched across the league’s social and digital channels.

The NBA believes the current European basketball market is undervalued and lacks teams in marquee cities, according to a source familiar with the matter. Two-thirds of teams in the already established EuroLeague lose money, according to the Wall Street Journal.

The NBA would be looking to bring teams to Berlin, Paris, Rome and London, according to the source. It is also considering Spain, Turkey and Greece.

If the NBA moves forward with the league, it could begin bringing exhibition teams to play in Europe in the near term. Eventually, there could even be NBA teams competing against European teams in a cup-style or all-star type event.

FIBA Secretary General Andreas Zagklis said the announcement is great news for European basketball and its fans.

“The project is conceived in a way that will improve the sustainability of the entire European basketball ecosystem, including players, clubs, leagues and national federations, by generating a knock-on effect that will strongly benefit basketball fans throughout Europe,” he said in a statement.

The NBA just completed the fifth season of its African League, also in partnership with FIBA. The league said it has grown every year in attendance, merchandise sales and social engagement.

Correction: This story has been updated to reflect the potential franchise value of teams.

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Europe stands at a crossroads: compete meaningfully in the AI race or stick to its world-leading climate goals. 

“It’s like a fork in the road moment for Europe,” Wedbush Securities’ Dan Ives told CNBC. The bloc can either “play in the future” or risk “missing a big part of this technology wave.”

The dilemma is compounded by the region’s mandates for green energy. 

Globally, energy is the biggest bottleneck for building out AI-related data center projects. While the U.S. fires up fossil-fuel plants to power its build-out, Europe requires developers to disclose energy and water efficiency measures, adding red tape that can slow project launches. 

The European Union is often celebrated for its suite of agenda-setting environmental policies and how it has made strides with new mechanisms, such as the forthcoming carbon border tax. However, some critics argue it gets in the way of business. The continent is seen as “anti-entrepreneur,” Ives said, which pushes European technology names and startups to move to the U.S., Middle East, or Asia in pursuit of more favorable policies. 

As Europe attempts to catch up in the AI race, the need for power-hungry infrastructure increases, demand for electricity surges — and that friction has become harder to ignore. Additional renewable energy capacity was intended to replace more polluting sources, but there are now concerns that this will play out differently.

“You can see in the U.K. that we’re already rowing back on some of our commitments,” Paul Jackson, regional Global Market Strategist at Invesco, told CNBC – and Europe will likely follow suit. 

“This is a fairly regular process that when times are good, it’s easy to persuade individuals, businesses, governments, to move in the right direction on things like climate change, and to take some of the cost associated with doing that,” Jackson said. However, pushing the climate agenda down the priority list is one of the easiest things legislators can do when faced with tougher times and competing interests, he added. 

The U.K.’s energy grid is free of coal, which is significantly dirtier than gas — Europe’s, however, is not.

“I’m worried that, at a certain stage, coal power plant closures might get actually postponed,” Jags Walia, head of global listed infrastructure at Van Lanschot Kempen, told CNBC.

Taking fossil fuels offline as renewables come online works when energy demand is flat, but that’s no longer the case, he said. Data centers also require constant connection, so the intermittency of wind and solar could prove tricky.

“Electricity wise, we might not be able to afford to close down coal power plants, which is going to be a real headache for the energy transition and energy security as well,” Walia said.

Over the course of the year, Europe has rolled back a number of environmental commitments. 

On Dec. 16, the EU watered down its effective ban on new combustion-engine cars from 2035. On Dec. 9. it approved a one-year delay to the implementation of a fresh EU emissions trading system for buildings, road transport and small industries – though simultaneously committed to slashing emissions by 90% by 2040.

Earlier this year, the Corporate Sustainability Due Diligence (CSDDD) and Corporate Sustainability Reporting (CSRD) directives were also narrowed and pushed back.

A ‘pragmatic’ approach

Some have welcomed the moves as much-needed pragmatism rather than a retreat. 

“We are always at the edge of navigating into a position where it becomes so unattractive to be present in Europe that it doesn’t make sense anymore. And on the other hand, a lot of the regulation is direly needed,” Nick de la Forge, a general partner at venture capital fund Planet A Ventures, which backs climate-related technology startups, told CNBC’s “Europe Early Edition” on Dec. 11. 

“And luckily, what we are seeing is a pretty healthy revamp.” 

The reshaping of directives, including the Sustainable Finance Disclosure Regulation (SFDR), which is currently undergoing review, is “quite pragmatic, and we think that’s an improvement,” De la Forge said. 

AI advocates tout the technology’s ability to make energy systems more efficient and boost sustainability, positioning it as both a problem and solution to intensifying demands on the grid, and perhaps making it worth the investment. 

“As AI rapidly advances, its potential to strengthen Europe’s energy resilience and accelerate the clean transition is becoming increasingly clear. At the same time, the growing electricity needs of AI technologies call for smart, forward-looking planning,” a European Commission spokesperson told CNBC.

They added that the economic bloc “is fully prepared to seize these opportunities while safeguarding the stability and reliability of Europe’s energy system.”

The Commission did not specifically address questions asked by CNBC around a rollback of sustainability legislation as a result of its AI push, or how it plans to meet the new legally binding target. 

Instead, a spokesperson for the bloc referred to the region’s preparations for a roadmap for the use of AI in the energy sector, in line with its broader Apply AI Strategy, which was designed to fast-track the deployment of the tech. 

‘We’re sort of toast’

If policymakers hold tight on sustainability requirements, AI infrastructure developers may instead offset their emissions with carbon credits or renewable energy certificates. One credit represents the removal of one metric ton of carbon dioxide, or the prevention of one metric ton from entering the atmosphere.

AI hyperscalers “do still have their headline decarbonization target” but are turning to such measures to meet them, according to Jim Wright, manager of the Premier Miton Global Infrastructure Income Fund. “Because, in reality, they will use some gas, and they may even use some coal,” he said, referring to variations in the makeup of energy grids.

That reality was recognized in the EU’s Dec. 9 deal, which included the use of carbon removal credits to reach the fresh reduction target. In all, it has created an era of energy addition rather than transition – a dynamic embraced by oil CEOs – as AI-driven demand for power outpaces supply from clean sources. 

It’s also a question of energy security, not only abundance. The data center and AI race “puts a lot more strain on our energy infrastructure, and as we have seen in recent years, we’re not terribly resilient when it comes to that,” said Jackson. It means adding an almost base-level demand of energy to existing grids, which could make pricing more volatile and lead to energy rationing, he said.

Climate change is an infrastructure and business risk — which is not going away, experts have told CNBC.

For Kokou Agbo Bloua, global head of research at Société Générale, it’s “a massive elephant in the room” and one of his biggest worries looking forward. 

Speaking to CNBC’s “Squawk Box Europe” on Monday, he said: “We’re sort of toast … pun intended, actually, because we’re on the path of two-and-a-half, three degrees [of warming above pre-industrial levels]. And if you look at green technologies, [they’re] being used for data centers, as opposed to replacing fossil fuels.”

But it could be some years before a formal scrapping of Europe’s environmental targets. “Sometimes on sustainability goals, what countries do is, if they are going to walk away from a goal, they try to leave it till the last minute,” Walia said.

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Meta has been hit with an EU antitrust investigation over its use of AI features in WhatsApp, as the European bloc continues to ramp up challenges to US big tech giants.

The probe will examine whether Meta’s new policy on allowing AI providers’ access to WhatsApp may breach EU competition rules, Brussels said in a statement Thursday morning.

A new policy announced by Meta in October prohibited AI providers from using a tool allowing businesses to contact customers via WhatsApp when AI is the main service offered, the European Commission said.

While businesses may still use AI tools for functions like customer support, the bloc was concerned the new policy might “prevent third party AI providers from offering their services through WhatsApp in the European Economic Area (EEA),” it added.

“The claims are baseless,” a WhatsApp spokesperson told CNBC in a statement, adding that the app’s application programming interface (API) was not designed to support AI chatbots and “puts a strain on our systems.”

“The AI space is highly competitive and people have access to the services of their choice in any number of ways, including app stores, search engines, email services, partnership integrations and operating systems,” the company added.

It comes months on from the Commission fining Google 2.95 billion euros ($3.45 billion) for breaching antitrust rules around online advertising. In April, Apple was fined 500 million euros after being found to have breached anti-steering obligations. The same month, Meta was hit with a 200 million euros fine for breaching obligations to give consumers the choice of a service that uses less of their personal data.

Fines for breaking the EU’s antitrust rules can reach as much as 10% of a company’s annual revenue. There are no dates set for the antitrust investigation to close, but previous cases have run on for years.

“We must ensure European citizens and businesses can benefit fully of this technological revolution and act to prevent dominant digital incumbents from abusing their power to crowd out innovative competitors,” said the bloc’s Commissioner for Competition Teresa Ribera.

The investigation will cover the entire EEA apart from Italy, to avoid an overlap with its own ongoing proceedings for the possible imposition of interim measures concerning Meta’s conduct.

U.S. President Donald Trump has previously threatened the EU with an investigation that could lead to tariffs for imposing fines and regulation on the country’s tech giants.

“As I have said before, my Administration will NOT allow these discriminatory actions to stand,” he said following the EU’s Google fine in September.

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Huge swathes of cash are flowing from Japan to European tech startups as risk-averse investors favor a more mature entrepreneurial ecosystem, helping to scale the continent’s booming deep tech cluster.

While the European startup and venture capital ecosystem has long operated in the shadow of Silicon Valley, it has become fertile ground for Japanese corporates, whose domestic market is younger.  

Japanese investors or venture capital funds who themselves have Japanese investors, known as limited partners, participated in European financing rounds worth more than 33 billion euros ($38 billion) since 2019 when a trade deal between the European Union and Japan came into force, according to research from venture capital fund NordicNinja and data platform Dealroom.   

For the five years leading up to the EU-Japan Economic Partnership Agreement, investment totaled 5.3 billion euros.

In Europe at that time, “there was no Japanese capital other than Softbank,” Tomosaku Sohara, co-founder and managing partner of Japan-Europe VC NordicNinja, told CNBC. NordicNinja, which has 250 million euros of assets under management, is a collaboration between the firm’s managing partners and Japan’s JBIC IG Partners.

“Softbank was pretty active already at that moment, because they had acquired Finnish gaming company Supercell,” Sohara said, noting that the acquisition injected life into Finland’s startup ecosystem. 

Now, Mitsubishi, Sanden, Yamato Holdings, and Marunouchi Innovation Partners are among those directly backing European tech, per the report, while Japan-linked venture capital firms such as NordicNinja, Byfounders, and Toyota‘s Woven Capital cut checks to startups on the continent. 

There are over two times more VC-backed startups in Europe than in Japan, per capita, and 4.3 times more unicorns, per the report. 

The shadow of Silicon Valley  

Japan’s appetite for investing was always there, Sohara said. Its multinationals — like many — headed stateside to set up corporate venture capital arms in early 2000, in search of a slice of the action at the time when some of today’s largest companies were just being thought up in dorm rooms.  

“Nobody wanted to look at Europe at that moment, but I think that after a couple of years they realized, ‘Hey, maybe the U.S. culture is totally different from the Japanese culture,’ and they began thinking, ‘Hey, maybe we need to look at another region like Europe,'” Sohara said, adding that the profile of entrepreneurs in Europe, many of whom came from large corporates at the time, was more aligned with Japan. That’s in contrast to the young founders coming from Stanford or university research and development departments, he said.

“They have experience at the corporates and also they have a mindset of entrepreneurship. Japan, unfortunately, is lacking the entrepreneurship mindset,” Sohara added, referring to Europe’s founders, many of whom came from Nokia and Skype.

The pull for founders

Japanese-linked investors have a penchant for one sector in particular: deep tech, which refers to companies building on top of scientific or engineering innovation. Deep tech and artificial intelligence accounted for 70% of deals made by such investors in Europe in 2024, echoing trends in the broader startup ecosystem as the AI, energy, and defense industries boom.  

The top-funded companies with Japanese participation include the U.K.’s autonomous vehicle startup Wayve, which raised $1.05 billion in an investment round in May 2024, British quantum computing firm Quantinuum, which secured 273 million euros in January 2024, and Spanish quantum firm Multiverse Computing, which saw investors cut it a check of 189 million euros in June 2025. The rounds were backed by Softbank, Mitsui and Toshiba, respectively.  

Such companies, however, typically need a lot of growth capital and industrial experience to scale successfully — two elements that Europe famously lacks.  

“Investment appetite is way stronger than [in] any strategics I’ve seen here in Germany or in Europe,”

Sarah Fleischer

co-founder and CEO, Tozero

“Japanese firms — and they’re old, most of them that we’re talking about, right — they’re just sitting on a pile of money. They’ve been saving money throughout the last century, and now they’re starting to spend it, to try to grow as a large corporate and increase their footprint outside of Japan,” said Sarah Fleischer, co-founder and CEO of Germany-based battery materials recycling startup Tozero. 

“You see that investment appetite is way stronger than [in] any strategics I’ve seen here in Germany or in Europe,” she added. Tozero has raised 14.5 million euros to date and counts NordicNinja, Honda and JGC among its investors.

It’s not just about the check. Japanese corporates and industrials have robust manufacturing and automotive know-how, Fleischer and Sohara noted respectively, meaning they are well positioned to plug Europe’s knowledge gaps when it comes to scaling large manufacturing projects.

Fleischer added that Japanese firms have long shored up their critical minerals supply chain and long-established trading firms, meaning they know how to secure essential components needed for the energy transition. For Tozero, this is an added plus, Fleischer said, given it’s in the business of recovering such materials from spent batteries. 

In the age of political uncertainty amid choppy U.S.-China relations, Japan also acts as a good bridge to the Asian markets, Fleischer said.

A slower pace and lower risk appetite

Back in Japan, the number of entrepreneurs is “still very limited,” Sohara said, as the older generation and “great talents” wanted to work for “a Toyota and Honda or Sony,” he added, but the younger generation’s mindset is beginning to change.  

Europe has also become the home to ambitious would-be founders searching for a tech ecosystem to build their companies in, Sohara said.

However, as collaboration between Europe and Japan scales, language remains a barrier as fluency in English is not widespread in Japan, he added.  

For Fleischer, this also poses challenges. “There’s so much miscommunication and local translation that could ruin a partnership instantly. And there’s also some sort of cultural aspect as well, one needs to probably be aware of,” she said, adding that she recently spent weeks in Japan getting to know her investors face-to-face, “because that’s still the sentiment” there.  

Decision-making can therefore be slower, the founder said, due to thorough research and preparation. “They just do their homework,” Fleischer said, noting that Japanese partners were hands-on in helping the company understand “how to build our next future commercial plant, potentially starting from Japan and then going worldwide.”

Indeed, “without the support from NN [NordicNinja] it would have been much more difficult to build the right relationships,” said Aaike van Vugt, co-founder and CEO of Dutch nanotechnology engineering firm VSParticle.

That’s in contrast to perhaps the most well-known Japanese player: Softbank. Softbank is “totally different” from traditional Japanese investor cultures, given it is driven by founder Masayoshi Son’s decisions rather than operating on a consensus basis, like most Japanese business, Sohara added.  

The venture firm, known for its lofty bets on WeWork and, more recently, chip company Arm, poured huge sums of cash into tech startups amid the 2021 venture capital tech boom, which saw at least one Japanese-linked investor involved in deals worth 11.2 billion euros, per the report. Softbank stood out during this period; it was involved in 22% of deals with Japanese-linked participation in 2021.

Interest ticking up

Looking forward, Sohara and Fleischer expect greater collaboration between Europe and Japan. However, Japanese investors are expected to participate in rounds worth 3 billion euros in 2025, per the Dealroom and NordicNinja report, representing a dip from last year.  

As many eyes turn to the Middle East for investment, Fleischer said that interest in Japan appears to be ticking up. Anecdotally, “people reach out to me for intros, which is fun, to meet Japanese corporate LPs,” she said, noting that this is a new development for her but that it may simply be because she has such investors now. 

“I think it’s also politically driven as well in Japan, by the government, to position themselves more geopolitically smartly and make sure that the corporates or the industries grow in certain ecosystems, strengthening their positioning as a country,” she said.  

Correction: This story has been updated to reflect that NordicNinja is a collaboration between its managing partners and Japan’s JBIC IG Partners, and to update Tozero’s investors.

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CEO of Supermicro Charles Liang speaks during the Reuters NEXT conference in New York City, U.S., December 10, 2024. 

Mike Segar | Reuters

PARIS — Super Micro plans to increase its investment in Europe, including ramping up manufacturing of its AI servers in the region, CEO Charles Liang told CNBC in an interview that aired on Wednesday.

The company sells servers which are packed with Nvidia chips and are key for training and implementing huge AI models. It has manufacturing facilities in the Netherlands, but could expand to other places.

“But because the demand in Europe is growing very fast, so I already decided, indeed, [there’s] already a plan to invest more in Europe, including manufacturing,” Liang told CNBC at the Raise Summit in Paris, France.

“The demand is global, and the demand will continue to improve in [the] next many years,” Liang added.

Liang’s comments come less than a month after Nvidia CEO Jensen Huang visited various parts of Europe, signing infrastructure deals and urging the region to ramp up its computing capacity.

Growth to be ‘strong’

Super Micro rode the growth wave after OpenAI’s ChatGPT boom boosted demand for Nvidia’s chips, which underpin big AI models. The server maker’s stock hit a record high in March 2024. However, the stock is around 60% off that all-time high over concerns about its accounting and financial reporting. But the company in February filed its delayed financial report for its 2024 fiscal year, assuaging those fears.

In May, the company reported weaker-than-expected guidance for the current quarter, raising concerns about demand for its product.

However, Liang dismissed those fears. “Our growth rate continues to be strong, because we continue to grow our fundamental technology, and we [are] also expanding our business scope,” Liang said.

“So the room … to grow will be still very tremendous, very big.”

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Jensen Huang, co-founder and chief executive officer of Nvidia Corp., left, and Emmanuel Macron, France’s president at the 2025 VivaTech conference in Paris, France, on Wednesday, June 11, 2025.

Nathan Laine | Bloomberg | Getty Images

Nvidia boss Jensen Huang has been on a tour of Europe this week, bringing excitement and intrigue to everywhere he visited.

His message was clear — Nvidia is the company that can help Europe build its artificial intelligence infrastructure so the region can take control of its own destiny with the transformative technology.

I’ve been in London and Paris this week following Huang around as he met with U.K. Prime Minister Keir Starmer, French President Emmanuel Macron, journalists, fans, analysts and gave a keynote at Nvidia’s GTC event in the capital of France.

Here’s the what I saw and the key things I learned.

The draw of Huang is huge

Huang is truly the current rockstar of the tech world.

At London Tech Week, the lines were long and the auditorium packed to hear him speak.

The GTC event in Paris was full too. It was like going to a music concert or sporting event. There were GTC Paris T-shirts on the back of every chair and even a merchandise store.

Nvidia GTC in Paris on 11 June 2025

Arjun Kharpal

The aura of Huang really struck me when, after a question-and-answer session with him and a room full of attendees, most people lined up to take pictures or selfies with him.

Macron and Starmer both wanted to be seen on stage with him.

Nvidia positions itself as Europe’s AI hope

Nvidia’s key product is its graphics processing units (GPU) that are used to train and execute AI applications.

But Huang has positioned Nvidia as more than a chip company. During the week, he described Nvidia as an infrastructure firm. He also said AI should be seen as infrastructure like electricity.

His pitch to all countries was that Nvidia could be the company that will help countries build out that infrastructure.

“We believe that in order to compete, in order to build a meaningful ecosystem, Europe needs to come together and build capacity that is joint,” Huang said during a speech at the Viva Tech conference in Paris on Wednesday.

Jensen Huang, CEO of Nvidia, speaks during the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France, June 11, 2025.

Gonzalo Fuentes | Reuters

One of the most significant partnerships announced this week is between French startup Mistral and Nvidia to build a so-called AI cloud using the latter’s GPUs.

Huang spoke a lot during the week about “sovereign AI” — the concept of building data centers within a country’s borders that services its population rather than relying on servers located overseas. Among European policymakers and companies, this has been an important topic.

Huang also heaped praise on the U.K., France and Europe more broadly when it came to their potential in the AI industry.

China still behind but catching up

On Thursday, Huang decided to do a tour of Nvidia’s booth and I managed to catch him to get a few words on CNBC’s “Squawk Box Europe.”

A key topic of that discussion was China. Nvidia has not been able to sell its most advanced chips to China because of U.S. export controls and even less sophisticated semiconductors are being blocked. In its last quarterly results, Nvidia took a $4.5 billion hit on unsold inventory.

I asked Huang about how China was progressing with AI chips, in particular referencing Huawei, the Chinese tech giant that is trying to make semiconductor products to rival Nvidia.

Huang said Huawei is a generation behind Nvidia. But because there is lots of energy in China, Huawei can just use more chips to get results.

“If the United States doesn’t want to partake, participate in China, Huawei has got China covered, and Huawei has got everybody else covered,” Huang said.

In addition, Huang is concerned about the strategic importance of U.S. companies not having access to China.

“It’s even more important that the American technology stack is what AI developers around the world build on,” Huang said.

Just reading between the lines somewhat — Huang sees a world where Chinese AI tech advances. Some countries may decide to build their AI infrastructure with Chinese companies rather than American. That in turn could give Chinese companies a chance to be in the AI race.

Quantum, robotics and driverless is the future

Huang often uses public appearances to talk about the future.

I asked him about some of those areas he’s bullish on like robotics and driverless cars, technology that Nvidia’s products can power.

Huang told me this will be the “decade of” autonomous vehicles and robotics.

Nvidia boss Jensen Huang delivers a speech on stage talking about robotics.

Arjun Kharpal | CNBC

During his keynote at GTC Paris on Wednesday, he also address quantum computing, saying the technology is reaching “an inflection point.”

Quantum computers are widely believed to be able to solve complex problems that classic computers can’t. This could include things like discovering new drugs or materials.

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U.S. consumer spending on Temu fell about 36% in May compared to a year earlier, while it fell 13% over the same period on Shein, according to trend data from Consumer Edge.

Nurphoto | Nurphoto | Getty Images

Temu and Shein are pivoting to Europe as their business in the U.S. takes a major hit from unfavorable trade policies. But the China-founded budget e-commerce apps may not receive a warm reception in their new target markets. 

In recent weeks, complaints have been filed against Temu and Shein in the EU, accusing them of unsavory business tactics. That comes as the bloc prepares a new two-euro flat fee on previously customs-free small packages from online marketplaces like Temu and Shein. 

Experts say the new developments could be ominous signs for the platforms, as their business has already suffered from the May closure of a small package tariff exemption in the U.S., as well as new duties at 54%, or $100 for those sent through the postal service. 

“As regulatory and trade pressures intensify in the U.S., Temu and Shein are increasingly turning to Europe and the UK as critical growth markets,” Anand Kumar, associate director of research at Coresight Research, told CNBC. 

However, Kumar said that the companies have begun to face regulatory headwinds in Europe and the U.K. that echo the scrutiny they’ve encountered in the U.S. 

“The EU’s proposed €2 customs fee is more than a minor surcharge—it’s a strategic regulatory move aimed at curbing the unchecked growth of ultra-cheap cross-border e-commerce, and it could reshape how platforms like Shein and Temu operate in Europe over the next 2–3 years,” he added. 

Europe pivot 

Temu and Shein have boosted their ad spending in Europe, particularly in the U.K. and France, according to a report from Reuters, reflecting their shift away from the U.S.

The growing importance of the EU and U.K. to the two companies has also been reflected in data from Consumer Edge Research, which traces consumer trends based on a sample of credit and debit card info. 

According to the data it sent to CNBC, Temu’s consumer spending in the U.S. fell about 36% in May from a year earlier, while Shein’s fell 13% over the same period. The company added that its data shows that some of Temu and Shein’s U.S. customers have shifted their spending toward legacy department stores and fast fashion retailers. 

Those trends coincide with data from market intelligence firm Sensor Tower showing that app usage of Temu and Shein in the U.S. is slowing significantly.

However, the opposite trends for the platforms were observed in the U.K. and EU. In May, year-over-year consumer spending growth reached 63% in the EU and 38% in the U.K. Shein experienced growth of 19% in the EU and 42% in the U.K. over the same period. 

For Temu, Consumer Edge data showed that growth was especially pronounced in the key market of France, Europe’s second-largest economy.  

To capitalize on the momentum in Europe, Temu and Shein have been aggressively expanding their operations across the region, including ramping up warehouse capacity, experimenting with localized business models, as well as significantly increasing digital ad spending in key markets like the U.K., France and Germany, according to Coresight’s Kumar. 

“This expansion is not merely opportunistic—it signals a strategic shift in how these companies envision their next phase of growth,” he said. 

“That said, the European market is not without its challenges. The region enforces stricter regulations on product safety, consumer protection, and fair competition, all of which require Temu and Shein to invest more in compliance and operational transparency,” he added. 

Experts say that those challenges and the EU’s potential duties on small-value packages may be signs of more pressures to come for Temu and Shein. 

Scrutiny intensifies 

According to French local media, the wording of an “anti-fast fashion” bill, which is under debate in the French National Assembly, was recently rewritten to single out ultra-cheap platforms like Shein and Temu. 

The bill, first approved by France’s lower house of parliament in March last year, seeks to penalize fast-fashion products for their environmental impact.

Meanwhile, on Thursday, the pan-European consumer organization BEUC filed a complaint with the European Commission against Shein over its use of deceptive techniques, or “dark patterns” that cause overconsumption. 

That comes after the European Commission announced its own investigation into Shein’s compliance with EU consumer law in February and, in May, urged Shein to respect EU consumer protection laws. 

BEUC has also filed a complaint against Temu, while 17 of its members filed the same complaint with their competent national authorities, the group said. 

Xiaomeng Lu, director of geotechnology at Eurasia Group, told CNBC that the latest scrutiny Temu and Shein are experiencing in the EU is reminiscent of that in the U.S. 

“[Temu and Shein] offer cost effective solutions and an efficient supply network that fare well in the fast moving fashion world. However their labor practices and human rights standards may not fully align with high value markets like the EU and U.S.,” Lu said. 

That conflict and “rising protectionism” globally are the “key drivers of these regulatory reactions,” she added.

In the U.S., officials had also taken issue with Temu over its alleged non-compliance with the Uyghur Forced Labor Prevention Act (UFLPA), which prohibits the import of goods made with forced labor from China’s Xinjiang region.

According to Coresight’s Kumar, Europe, for its part, is progressing toward stricter oversight through the Corporate Sustainability Due Diligence Directive — which EU member states have until July 2026 to integrate into their national laws. 

The directive would compel companies operating in the EU to identify and mitigate human rights abuses in their supply chains, disclose environmental impact and sustainability metrics and face legal consequences for failing to take adequate preventive steps.

That means Temu and Shein will face stringent compliance demands in the EU, Kumar said. However, the region still offers meaningful opportunities for expansion in an increasingly protectionist global trade environment, he added. 

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