Brussels Proposes Simplification of Controversial AI Legislation

The European Commission has unveiled a new action plan aimed at reforming the AI Act, a regulation intended to position the EU as a leader in trustworthy artificial intelligence. However, the legislation has faced criticism for potentially stifling innovation. The Commission is now taking steps to address these concerns by revising its approach.

Initially, the AI Act was seen as a cornerstone of the EU's strategy to fill the regulatory gap left by the United States and China in the field of AI. Critics argued that the stringent requirements for high-risk applications could hinder innovation and limit the EU's competitive edge. In response to these criticisms, the Commission's latest action plan signals a willingness to adapt its stance.

The primary objective of the action plan is to assist companies in navigating the regulatory landscape of the AI Act. To facilitate this, the Commission plans to establish a dedicated helpdesk to provide guidance and support.

Additionally, the Commission has launched a consultation process inviting businesses to identify specific areas where the AI Act may impede the development and application of AI technologies. Insights gathered from this consultation will inform a review of the EU's digital legislation scheduled for later this year. The overarching goal is to streamline the implementation of the AI Act, particularly for smaller enterprises.

Consumer protection advocates have expressed concerns regarding this move. They argue that much of the AI Act is yet to be enacted, and signals of potential rollbacks in regulatory requirements could lead to legal uncertainty and undermine public trust in AI technologies. In response to these concerns, the Commission reiterated its commitment to reducing bureaucratic obstacles while maintaining the core principles of the legislation that was set to take effect in 2024.

Germany's outgoing Federal Minister for Digital and Transport has endorsed the Commission's initiative, stating that reducing bureaucratic barriers is essential for unlocking the potential of AI in Europe. He emphasized the need for improved conditions for high-risk investments and the creation of growth opportunities for startups and tech companies in the region. He stated that innovation thrives in an environment where companies have the freedom to develop and bring new technologies to market.

Further to the proposed simplifications of the AI Act, the Commission reaffirmed its commitment to establishing an AI investment fund. This fund aims to mobilize EUR20 billion for the construction of up to five large-scale AI data centers, which are expected to be significantly more powerful than existing facilities. The realization of this funding will depend on the willingness of EU member states to contribute financial resources.

The fund, which is planned to be developed in collaboration with the European Investment Bank, seeks to attract private investors through risk-sharing mechanisms. Decisions regarding the awarding of contracts for the construction of these AI centers are expected to be made by mid-2026, and the new facilities are anticipated to operate at four times the capacity of current AI infrastructures.

In addition, the Commission aims to triple the capacity of data centers within the EU over the next five to seven years. This initiative is driven by concerns about reliance on non-EU cloud services and data center infrastructures, which pose risks to economic security. Concrete proposals for this expansion are expected to be presented by early 2026.