U.S. tech stocks received a boost from the European Commission today with hopes that it may be looking to water down its AI Act.
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European Reflection
The Commission confirmed that “a reflection” was “still ongoing” on delaying aspects of the regulation. This followed media reports that Brussels was weighing up changes with the aim of easing demands on big tech companies.
The act came into force in August 2024, but many of its provisions are yet to apply. Most obligations on companies developing high-risk AI systems that “pose serious risks to health, safety or fundamental rights” are not due to come into effect until August 2026 or a year after that.
According to a report in the Financial Times, the commission is considering giving a one-year “grace period” to companies breaching the rules on the highest-risk AI. This includes GenAI providers.
Earlier this year the EU released a code of practice to help thousands of businesses in the 27-nation trading bloc using general-purpose AI technology to comply with its new AI rulebook. These include chatbots like OpenAI’s ChatGPT.
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.
U.S. Anger
The act and code have been blasted by President Trump and businesses, like Facebook-owner Meta (META), which has accused it of overreach.
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. As can be seen from the example of Meta above, that could be a huge financial blow.
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