German AI startups are rallying behind the new government’s reported push to water down the EU’s landmark AI Act.
The Act lays out rules for organisations using AI in the EU, emphasising ethics, safety and transparency. But it’s drawn widespread criticism from tech companies at home and abroad, who say too-stringent regulations will hinder technological progress.
Over six months after the Act was passed, Germany’s proposed new coalition — the Christian Democrats (CDU/CSU) and centre-left Social Democratic Party (SPD) — is in talks to revise the Act and make it more “innovation-friendly,” according to a memo leaked to Euractiv.
The push has been backed by German AI startups, some of which say they have been in close discussions with the new coalition about the path forward.
Jarek Kutylowski, CEO and founder of AI translation startup DeepL tells Sifted: “If this is the direction of the future coalition, we are encouraged to see [the government’s] openness to a tech and innovation agenda — thereby fostering Europe’s competitiveness in AI and strengthening the regional economy.”
Prior to the election, Germany positioned itself as one of the European voices pushing for light-touch regulation. In November 2023 in the final stretch of the Act’s negotiations, Germany — alongside France — blocked the EU’s proposal over concerns about extra regulations put on companies building foundational models.
The European Commission is currently weighing up calls to soften regulations, by making more parts voluntary rather than compulsory, though it’s been met with sharp criticism. On Tuesday, EU lawmakers signed a letter warning loosening the AI Act would be ‘dangerous and undemocratic.’
Founders, conversely, are concerned the EU AI Act will provide an increased cost burden on startups. According to a recent study by the German AI Association and VC firm General Catalyst, AI compliance could cost startups €200k per year and take over 12 months to implement.
Daniel Khachab, founder of Choco, a software company digitising ordering, supply chain and communications for restaurants and suppliers, says “the EU AI Act has to go”, as it “is stalling the very innovation it aims to regulate.”
He adds that he’s “carefully optimistic” the CDU, who “are more open and understand the importance of AI,” could relax AI regulation.
“I am optimistic the Act will be loosened, I just hope it’s radical enough,” he says.
Sifted approached the European Commission for comment.
Read the orginal article: https://sifted.eu/articles/german-startups-ai-act/
