EU Compromises? Major News Emerges on AI!

Breaking News

The EU's Artificial Intelligence Act officially took effect in August last year, marking the world's first comprehensive AI regulation and is considered the strictest global AI regulatory framework. In August this year, US President Donald Trump threatened on social media to impose high tariffs on countries implementing "digital taxes, digital services legislation, or digital market regulations."

The Reported Compromise: Pausing Parts of the AI Act

According to a November 7 report by the Financial Times, the European Commission is planning to suspend the implementation of certain provisions of its Artificial Intelligence (AI) Act. The report states that the EU will decide on a so-called "simplification package" on November 19, which will relax some digital regulations, including the AI Act that took effect last year.

This move by the EU follows months of lobbying by tech giants like Meta and Alphabet, as well as pressure from the Trump administration. A senior EU official revealed that the EU has been communicating with the Trump administration regarding adjustments to the AI Act and other digital regulations as part of a broader regulatory simplification process.

According to a draft seen by the media, the European Commission is considering granting companies that violate the highest-risk category rules a "one-year grace period." This means providers of generative AI systems already on the market before the implementation date might get a one-year transition period to "allow businesses reasonable time to adjust operations without disrupting the market."

Furthermore, the EU proposes delaying the enforcement of fines for breaches of AI transparency rules until August 2027 to "give AI system providers and users sufficient time to adapt" to these obligations. The draft also plans to simplify compliance burdens for companies and centralize enforcement by establishing a dedicated AI Office.

EU officials stated that the proposal is still under informal discussion between the Commission and member states, and the final version might be adjusted before formal adoption on November 19. Even after the Commission proposes it, the plan would still require approval by a majority of EU member states and the European Parliament to take effect.

Background: The EU AI Act & US Pressure

The EU AI Act formally took effect on August 1 last year. As the world's first comprehensive AI law, its main provisions will be phased in over the coming years. Most rules concerning "high-risk" AI systems, including those posing a significant threat to public health, safety, or fundamental rights, are expected to fully apply from August 2026.

The Act mandates that AI systems like chatbots must clearly inform users they are interacting with a machine, and AI technology providers must ensure synthetic audio, video, text, and image content can be detected as AI-generated. It also prohibits using AI systems considered to pose an clear threat to users' fundamental rights.

Fines for violations can reach up to €35 million or 7% of a company's global annual turnover, whichever is higher.

On February 4 this year, the EU issued guidelines for the AI Act, clarifying "prohibited areas" for AI. However, Meta's Global Affairs President Nick Clegg deemed these non-binding guidelines "unworkable," suggesting Europe's regulatory environment was "pushing Europe to the fringe."

In April, media reported that the Trump administration was pressuring Europe to abandon a set of upcoming AI regulatory guidelines that would mandate stricter transparency standards, risk controls, and copyright rules for advanced AI developers.

President Trump has repeatedly accused EU tech regulations and fines of deliberately targeting US companies. US House Judiciary Committee Chairman Jim Jordan sent letters to EU leaders expressing concerns that EU policies restrict the free speech rights of American citizens. In comments at the January Davos World Economic Forum, Trump suggested EU regulation was effectively a "tax by another name."

On August 26, President Trump posted on social media: "I warn every country that has implemented Digital Taxes, Legislation, Rules, or Regulations that unless these discriminatory measures are removed, I, as President of the United States, will place a large additional Tariff on your exports to America, and place export restrictions on our highly protected Technology and Chips. Respect the United States and our great Tech Companies, or pay the price!"

Simultaneously, the US State Department launched a lobbying campaign against EU tech regulations. Multiple media analyses indicated the focus was the Digital Services Act (DSA), but it also covered the Digital Markets Act (DMA) and the EU's AI regulatory framework. Reports then emerged that the EU, under US pressure, intended to suspend or modify some policies, which the EU denied. European Commission Executive Vice-President Margrethe Vestager, responsible for tech sovereignty, stated in September that the DSA and DMA are EU's "sovereign legislation" and the EU would continue implementing these digital laws.