Report from the Financial Times
In Brief – The chief executives of 44 large European companies including are publicly urging European Commission President Ursula von der Leyen to initiate a two-year pause in the implementation of the AI Act, warning that unclear and overlapping regulations are threatening the EU’s competitiveness in the global AI race. The letter organized by the EU AI Champions’ Initiative, a group representing 110 companies, aims to send a message that major European companies that are not tech businesses themselves share the concerns of AI developers that AI regulation threatens the continent’s competitiveness by slowing the ability of non-tech companies to “deploy AI at the scale required by global competition.” The AI Act involves a rolling implementation schedule, with the CEOs asking for the pause to include the obligations for general-purpose AI models (GPAI), due to enter into force this August, and the high-risk AI systems, due to take effect in August 2026.
Context – The initial framework of the AI Act was to implement a risk-based regulatory regime for applications using AI, not an effort to regulate the underlying AI technology itself. But the EU Parliament changed course after the emergence of Chat-GPT, pushing to regulate core “foundation models”. This shift was divisive among EU-based AI innovators from the beginning, and concerns have only grown. Globally, the trend has not been toward countries enacting their own version of the AI Act, but in the other direction, with the US, UK, and Japan focusing more on encouraging investment and innovation. Some European leaders are joining in, backed by the Draghi Report on European competitiveness that reinforces concerns with inconsistent and restrictive regulations. French President Macron has called for the EU to “resynchronize with the rest of the world” on AI and Commissioner Henna Virkkunen has said that Commission will be business-friendly in implementing its new rules. But the parliamentarians who toughened up the AI Act reject efforts to water down the landmark regulation and a Commission spokesperson has indicated that the GPAI Code of Practice may be delayed only until the end of 2025 rather than longer.