The European Union’s decision to delay key provisions of its Artificial Intelligence Act has sparked concerns within the technology sector regarding regulatory clarity and competitive positioning. This postponement is part of a broader initiative to streamline digital regulations and has already drawn criticism from business leaders and technology experts across Europe.
The delay comes at a time when businesses are struggling to prepare for the rapidly evolving landscape of AI regulation. There is particular anxiety surrounding the uncertainty regarding when or if the initial provisions will return, and in what form. This shift is also tied to amendments in the enforcement mechanism, transitioning oversight from national authorities to self-classification and assessment by the organizations deploying high-risk AI systems.
Jane Smith, Chief Data & AI Officer at ThoughtSpot, expressed skepticism about the overall direction the EU is taking. “In delaying the AI Act, the EU is abandoning the one area where it could have led globally: rigour,” she stated. “Speed was never going to be Europe’s advantage in AI; standards were. While China competes on scale and the US on capital and innovation, Europe is unlikely to win in either of those areas.” Smith highlighted the uncertainty created by the delay, suggesting it undermines Europe’s competitive advantage. “Rather than simplifying the regulatory landscape as claimed, this move leaves everyone unclear about what to expect. Will these rules return unchanged in a year, in a different guise, or is this a complete change of approach?”
Compounding the issue is the growing concern that a less prescriptive approach could heighten compliance burdens on organizations without delivering the clarity necessary for effective business planning. The shift away from national authority oversight for high-risk AI systems places the responsibility for assessment and classification squarely on companies. Nikolas Kairinos, CEO of RAIDS AI, voiced serious concerns about this transition. “More concerning than the timeline extension is the Commission’s shift from national authority classification to self-assessment for high-risk AI systems,” he stated. “This transfers legal accountability to organizations without reducing compliance requirements, leaving them open to significant fines. Self-assessment can appear as permission to skip governance—organizations mustn’t make this mistake.”
Kairinos also cautioned against complacency among businesses. “Waiting for a catastrophe to happen is the wrong approach and only results in poorly designed rules,” he warned. “Delaying implementation creates a further problem; complacency can set in, leading to a crisis-driven scramble when deadlines finally arrive. The same thing happened with GDPR, so businesses must understand that the delay isn’t a reason to postpone; it’s a reason to start preparing well ahead of the December 2027 deadline.”
The EU’s approach to regulating artificial intelligence has been viewed globally as an attempt to strike a balance between fostering innovation and protecting individual rights. However, with other major powers prioritizing different strengths—scale for China and capital and innovation for the United States—the delay may affect how businesses within the EU compete in the global digital economy. Smith questioned the motives behind the EU’s decision to delay. “It feels like Europe has capitulated to Big Tech pressure, which is a shame,” she remarked. “The EU was one of the few major bodies taking a stand for people over corporate interests, and this represents a significant step back from positioning itself as the global leader in safe and responsible AI.”
Kairinos argued that waiting for regulatory certainty could introduce real business risks. “Today’s delay aside, the fundamental issue hasn’t changed; organizations need to build AI governance capabilities that enable innovation and competitive advantage,” he said. “Failure to do so will only result in damaged reputations, contract losses, and a lack of competitive edge.” As the EU grapples with the complexities of AI regulation, businesses are urged to remain vigilant and proactive, ensuring they adapt to the evolving landscape to secure their standing in an increasingly competitive global market.
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