Pressure is mounting on the EU to pause the rollout of its controversial AI Act, ahead of the bloc’s crunch meeting with tech giants like Google and Meta on Wednesday.
On Monday, dozens of European startups and investors published an open letter demanding the bloc halt plans to enforce the Act, branding it a “rushed ticking time bomb” that threatens to undermine competition in the region and force some companies to relocate.
The European Commission has invited world-leading companies like OpenAI, Anthropic and Google to present a final draft of the Act’s Code of Practice — intended to guide how general-purpose AI models, like LLMs, are regulated — in a last-ditch effort to win industry backing ahead of an August 2 implementation deadline.
Ahead of Wednesday’s meeting, Karl Rosander, founder and chairman of Stockholm-based dronemaker Nordic Air Defence, tells Sifted the regulation has “become overly complex and disconnected from the realities of building AI […] If the Act goes ahead as written, Europe will lose its edge,” risking a brain drain and increasing dependence on foreign AI in sectors like defence.
“The Act needs more than tweaks — it needs to be rethought,” he says, noting it was proposed in April 2021, before the war in Ukraine, the rise in GenAI and mounting interest in sovereign defence tech.
“The world has changed,” he tells Sifted, and the rules must reflect the continent’s current need for “a competitive, secure, and self-reliant” AI ecosystem.
Stifling innovation
From climate tech to media startups, more and more founders from a wide range of sectors echoed calls for the EU to rethink the AI Act.
Music tech company Epidemic Sound’s cofounder Oscar Höglund says a pause would give the EU an opportunity to better protect artists in the face of AI-related copyright issues. “More time is needed to work on the General-Purpose AI Code of Practice as it’s at risk of watering down the copyright-related obligations,” he says.
“Obligations need to be clarified to ensure that copyright is respected and that rightsholders and artists are protected.”
Elsewhere, director of public and government affairs at satnav maker TomTom Stephanie Leonard tells Sifted “the Commission is simply not ready to implement the rules it has drafted,” and says this could “hurt the competitiveness of European industry.”
Leonard points to a lack of agreement on common AI standards and unclear rules for the individuals and companies who use AI models or systems developed by others. “We can expect chaos in the industry with AI developments put on hold,” if the Act enters into force in its current state, she says. Both TomTom’s cofounders Corinne Vigreux and Harold Goddijn signed the letter.
John Diklev, founder of Stockholm-based energy provider Flower, tells Sifted the Act doesn’t go far enough in its commitments to clean energy. “AI isn’t only about algorithms, it’s also about energy,” he says. “Without stable, affordable renewable power, it’s hard for Europe to compete at scale.”
Meanwhile, Kitty Mayo, CEO of new earlystage fund Project Europe, tells Sifted that “it seems ludicrous to pass an act that would meaningfully harm European companies’ ability to be competitive in Europe, let alone globally.”
Filip Dames, founding partner at Cherry VC, shares this concern, telling Sifted the bloc needs a framework which “fosters rather than stifles innovation.”
Read the orginal article: https://sifted.eu/articles/startups-rally-against-ai-act/
