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EU’s New AI Framework Sparks Investor Worry for U.S. Tech Giants

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The EU is powering ahead with its new AI rules.

EU’s New AI Framework Sparks Investor Worry for U.S. Tech Giants

In a blow to U.S. tech firms Meta Platforms (META) and Alphabet-owned Google (GOOGL) as well as European group ASML (ASML), the EU has continued the acceleration of its new AI Act.

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The EU today released a code of practice to help thousands of businesses in the 27-nation trading bloc using general purpose artificial intelligence technology to comply with its new AI rule book. These include chatbots like OpenAI’s ChatGPT.

Safety and Security

The code focuses on three areas: transparency requirements for providers of AI models that are looking to integrate them into their products; copyright protections; and safety and security of the most advanced AI systems.

The EU code is voluntary and complements the EU’s AI Act, a comprehensive set of regulations that was approved last year and is taking effect in phases.

The AI Act bans cognitive behavioral manipulation and social scoring. It also defines a set of “high-risk” uses, such as biometrics and facial recognition, or AI used in domains like education and employment. App developers will have to register their systems and meet risk and quality management obligations to gain EU access. Violations could draw fines of up to 35 million euros ($41 million), or 7% of a company’s global revenue.

Unworkable Regulations

Chatbots are considered lower risk and will therefore have fewer obligations enforced. The full rules will come into force in mid-2026.

Some Big Tech companies, such as Meta have claimed the regulations are unworkable.

Recently, over 40 European companies, including Airbus (EADSF) and French AI startup Mistral, urged the bloc in an open letter to postpone the regulations for two years. They say more time is needed to simplify “unclear, overlapping and increasingly complex EU regulations” that put the continent’s competitiveness in the global AI race at risk.

“Today’s publication of the final version of the Code of Practice for general-purpose AI marks an important step in making the most advanced AI models available in Europe not only innovative but also safe and transparent,” the commission’s executive vice president for tech sovereignty, security and democracy, Henna Virkkunen, said.

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