European Companies Alarmed by Proposed AI Regulation

European companies AI concerns

• A group of over 150 European companies have expressed concerns about the proposed regulation on artificial intelligence (AI) within the European Union (EU).
• The companies argue that the proposed rules could seriously hamper competitiveness and fail to adequately address the potential challenges associated with AI.
• They are particularly concerned about the proposed regulations surrounding generative AI, which they claim would heavily regulate foundation models, regardless of their specific use cases.
• The companies propose that regulators in Brussels should adopt a law that adheres to “broad principles within a risk-based framework.”
• They also call for the establishment of a regulatory body consisting of industry experts to oversee the implementation of the law as AI technology continues to advance.

KEYPOINTS

• Over 150 European companies have concerns about the proposed AI regulation in the EU.
• They argue that the rules could hamper competitiveness and fail to address potential challenges.
• They are particularly concerned about the regulations surrounding generative AI.
• They propose a risk-based approach to regulation and the establishment of a regulatory body.

A group of over 150 European companies, including major players like Siemens, Airbus, and Heineken, have come together to voice their concerns regarding the proposed regulation on artificial intelligence (AI) within the European Union (EU). In an open letter addressed to EU institutions, these companies argue that the proposed rules could seriously hamper competitiveness and fail to adequately address the potential challenges associated with AI.

The letter, sent out on Friday, highlights that the draft legislation could “put Europe’s competitiveness and technological sovereignty at risk without effectively addressing the challenges we currently face and will face in the future.” Of particular concern to the companies are the proposed regulations surrounding generative AI, which they claim would heavily regulate foundation models, regardless of their specific use cases.

According to the companies, these rules would impose disproportionately high compliance costs and liability risks on companies involved in the development and implementation of AI systems. They argue that this could potentially lead to businesses relocating outside the EU, investors withdrawing from AI development in Europe, and the emergence of a significant productivity gap when compared to the United States.

Rather than focusing the legislation primarily on generative AI and employing a rigid compliance approach, the companies propose that regulators in Brussels should adopt a law that adheres to “broad principles within a risk-based framework.” Furthermore, the coalition calls for the establishment of a regulatory body consisting of industry experts to oversee the implementation of the law as AI technology continues to advance.

In response to the letter, Dragoș Tudorache, the MEP who led the development of the draft law, suggested that the signatories may have misinterpreted the text and reacted hastily based on limited information. He maintained that the only “concrete” suggestions put forward by the companies are already being considered by the European Parliament, including an industry-led process for defining standards, industry involvement in governance, and a light regulatory regime emphasizing transparency.

The debate surrounding AI regulation is expected to persist in the coming months, with the European Commission anticipated to release a final version of the proposed law later this year.

What are your thoughts on the concerns raised by these companies?

If you ask me then, I think the concerns raised by these companies are valid. The proposed AI regulation in the EU could have a significant impact on the competitiveness of European businesses. It is important to ensure that the regulation is proportionate and does not stifle innovation. I agree with the companies that a risk-based approach to regulation is the best way to balance the need to protect consumers and businesses with the need to promote innovation. I also think it is important to establish a regulatory body with industry expertise to oversee the implementation of the law as AI technology continues to advance.