Deep Dives

European tech firms and VCs concerned about over-regulation of AI

June 30, 2023
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Artificial Intelligence (AI) legislation in the European Union (EU) is sparking debates among top executives. A group of signatories, including leaders of Europe's major companies, have voiced concerns over the upcoming AI Act. They argue that the legislation would hamper Europe's technological competitiveness and innovation, and propose a risk-based approach to AI regulation instead.

AI Act Concerns: Executives of top European companies have expressed concerns about the impending AI Act, claiming it might harm Europe's competitiveness.
  • They fear that the Act would lead to companies exiting Europe, redirection of investments, and stunted technological growth in the region.
  • The letter containing these concerns was sent to the European Parliament, Commission, and member states.

  • Impact of New Requirements on Generative AI: The letter also focused on the European Parliament's recent additions to the AI Act that impact generative AI tools.
  • New requirements added on June 14 could provoke "disproportionate" compliance costs and liability risks for these tools, according to the signatories.
  • This could potentially put Europe behind the US in AI development, impacting sectors from the economy to culture.

  • Proposed Solutions: The signatories suggested alternative solutions to the current form of the AI Act.
  • They proposed restricting EU laws to broad principles in a risk-based approach, to be overseen by a dedicated body and adaptable to new advances and risks.
  • This approach, they believe, should be developed in dialogue with the economy.

  • Support for Certain AI Act Provisions: Despite their concerns, the business leaders expressed support for some aspects of the AI Act.
  • They endorsed mandatory safety testing for new systems, standard labeling of AI-generated content, and a duty of care in model development.

  • Reaction from Lawmakers: Lawmakers have responded to the business leaders' concerns and suggestions.
  • Dragos Tudorache, a key player in drafting the AI Act, dismissed the letter, stating that its authors have not carefully read the Act.
  • Despite this, there's still time for more discussion, as the AI Act is not expected to be enforced until 2026.
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