Digital Europe, a digital technology trade association, has urged the EU to avoid excessive regulation in its forthcoming AI bill in a recent letter.
As EU lawmakers enter the final stages of negotiations on the bill, the association expressed worries about the handling of foundation models and general-purpose artificial intelligence (GPAI). They cautioned that stringent regulation could hamper the growth of European AI startups.
Digital Europe stated: “For Europe to become a global digital powerhouse, we need companies that can lead in AI innovation, particularly those utilizing foundation models and GPAI. As representatives of the European digital industry, we recognize the significant opportunities presented by foundation models and the emergence of new innovative players in this area, many originating from Europe. We must not regulate them out of existence before they have the chance to scale, or drive them away.”
According to the association, only 8% of European companies currently utilize AI, and a mere 3% of global AI unicorns are based in the EU.
The letter highlighted the substantial compliance costs for small and medium enterprises (SMEs), estimating that the expenses could exceed €300,000 for startups.
Digital Europe asserted: “The AI Act does not need to regulate every new technology; we strongly endorse maintaining the regulation’s original focus on high-risk uses rather than specific technologies.”
The letter also pointed out potential conflicts with existing sector regulations.
Key signatories of the letter include Camilla Ley Valentin, CEO of DI Digital; Michał Kanownik, president of Digital Poland; Maria Shevchuk, acting CEO of IT Ukraine Association; and Stella Morabito, director general of AFNUM.
The trade association concluded with several recommendations:
– The risk-based approach should remain central to the AI Act.
– Any regulatory shortcomings will be exacerbated at the sectoral level, particularly in healthcare.
– Regulation of GPAI and foundation models should prioritize information sharing, cooperation, and compliance support across the value chain.
– The EU’s comprehensive copyright protection and enforcement framework already includes provisions to address AI-related copyright concerns.