Several prominent companies in Europe have united to voice their concerns about the European Union’s recently approved Artificial Intelligence Act. In an open letter addressed to the European Parliament, Commission, and member states, over 150 executives from companies such as Renault, Heineken, Airbus, and Siemens criticized the act, claiming it could be ineffective and detrimental to competition. This move reflects the growing skepticism and reservations surrounding the new regulations.
The AI Act was greenlit by the European Parliament on June 14th after two years of development and expansion to encompass recent AI breakthroughs like large language AI models (LLMs) and foundation models. However, the companies argue that the approved rules are too extreme and could jeopardize Europe’s competitiveness and technological sovereignty. They fear that rather than fostering an environment for AI innovation, the act could stifle the opportunity for Europe to rejoin the technological avant-garde.
One of the major concerns of the companies revolves around the legislation’s strict rules targeting generative AI systems. These systems fall under the category of foundation models and must be registered with the EU, undergo risk assessments, and meet transparency requirements, such as disclosing copyrighted data used in training the models. The signatories of the open letter claim that such compliance obligations would impose disproportionate costs and liability risks on the developers of these models, potentially leading to their withdrawal from the European market.
Jeannette zu Fürstenberg, founding partner of La Famiglia VC and a signatory on the letter, argues that the AI Act, in its current form, could have catastrophic implications for European competitiveness. She highlights the spirit of innovation currently present in Europe and warns that regulations burdening young and innovative companies could undermine this progress.
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In response to the letter, Dragoș Tudorache, a Member of the European Parliament who led the development of the AI Act, dismisses the concerns raised by the companies. Tudorache suggests that these companies are reacting based on the influence of a few and maintains that the draft EU legislation provides an industry-led process for defining standards, governance, and a light regulatory regime that emphasizes transparency.
The open letter also calls for the creation of a regulatory body comprising experts from the AI industry. This body would monitor the application of the AI Act as the technology continues to evolve, ensuring that it remains effective and that any necessary adjustments can be made.
It is worth noting that OpenAI, the company behind ChatGPT and Dall-E, previously lobbied the EU to alter an earlier draft of the AI Act. The company requested the removal of a proposed amendment that would have subjected all providers of general-purpose AI systems (which includes LLMs and foundation models) to the act’s most stringent restrictions. Although the amendment was not incorporated into the approved legislation, OpenAI’s CEO, Sam Altman, warned that the company might consider withdrawing from the European market if it could not comply with the regulations. However, he later clarified that OpenAI has no plans to leave.
Overall, the collective action taken by these prominent European companies reflects their concerns about the potential negative impact of the AI Act. They believe that the act’s stringent rules and compliance obligations could hinder Europe’s competitiveness and technological advancements rather than fostering a suitable environment for AI innovation. It remains to be seen how the concerns raised in the open letter will be addressed and whether any amendments or modifications will be made to the AI Act in response.
