European Start-ups Misled on EU AI Act’s Impact
European start-ups are reportedly being misled into believing that the EU AI Act is stifling innovation, a narrative that Carme Artigas, former AI minister of Spain and co-chair of the United Nations advisory board on artificial intelligence, strongly refutes. At the Europe Startup Nations Alliance forum, Artigas emphasized that this misconception is being propagated by external forces, particularly from the US, to dissuade investment in Europe, making European start-ups more susceptible to acquisition. She highlighted that the AI Act’s primary goal is to provide citizens with the confidence to embrace AI technologies widely, countering the notion that it is overly restrictive.
The AI Act, which became effective on August 1, is the first binding regulation of its kind, categorizing AI systems by risk levels. Most systems face minimal obligations, while high-risk systems must adhere to certain requirements, including risk mitigation and data quality standards. Systems with unacceptable risk levels, such as those enabling social scoring, are prohibited. Lucilla Sioli, head of the European Commission’s AI Office, clarified that the act predominantly involves self-assessment, aiming to foster trust and thereby stimulate innovation.
Despite criticisms, some experts acknowledge a minor truth in the concerns about the AI Act’s impact on the AI ecosystem. Holger Hoos, a founder of the Confederation of Laboratories for Artificial Intelligence Research in Europe, suggested that the narrative benefits US tech companies by potentially weakening European competition. He proposed establishing a European AI Research Council to enhance resource pooling and drive AI development, similar to the CERN model, to mitigate competitive disadvantages.
The debate continues as to whether the AI Act will negatively impact innovation. Clark Parsons, CEO of the European Startup Network, argued that the issue is not solely regulatory but also involves the need for a stronger innovation financing ecosystem in Europe. He pointed out that European companies are relocating to the US for better access to capital and early-adopting customers. While the AI Act focuses on regulating risky applications, the perception of regulation, even if light, contrasts with the US’s non-regulation approach and influences the tech community’s outlook.
Source: EU is ‘losing the narrative battle’ over AI Act, says UN adviser
