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Stakeholders in the tech industry are raising concerns over the potential consequences of the upcoming EU AI Act, warning that it could stifle innovation and drive AI startups out of existence. The proposed regulations categorize AI models based on their risk factors, with startups developing high-risk foundation models facing additional requirements. Tech policy group DigitalEurope emphasizes the importance of allowing companies, especially startups, to harness foundation models for long-term innovation and competitiveness on a global scale. Challenges for AI startups under EU AI act Tech policy group DigitalEurope has issued a joint statement cautioning that the EU AI Act, in its current form, could adversely impact AI startups. The Act classifies AI models based on risk, ranging from ‘minimal’ to ‘unacceptable’ and ‘high risk.’ Startups dealing with high-risk foundation models would be burdened with additional requirements, including regular reporting on data and algorithm quality.  This could lead to higher costs and a slower pace of development, potentially hindering innovation and competition with global counterparts. DigitalEurope argues that limiting the use of foundation models may impede the growth of new players in the AI industry. The statement underscores the need for Europe to foster innovation and become a global digital powerhouse.  The group contends that the ability of European companies to deploy AI in key sectors, such as green tech, health, manufacturing, and energy, is crucial for the continent’s competitiveness and financial stability. Critics of the EU AI Act highlight the potential financial burdens on smaller enterprises. Data compiled by the European Commission indicates that compliance costs for a small to medium-sized business launching a single AI-enabled product could be around €300,000. Detractors argue that such costs could become untenable for smaller enterprises, hindering their ability to participate in the AI landscape. DigitalEurope’s response to member states’ agreement The pushback against…

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Filed under: News - @ November 24, 2023 11:16 pm