EU AI Act Rules Land August 2 as Europe's Funding Gap Widens

The EU AI Act's main obligations for general-purpose AI models arrive on August 2. The Next Web reports on the run-up to the deadline, noting that calls to postpone the roll-out have grown louder. Figures including Swedish Prime Minister Ulf Kristersson, Bosch CEO Stefan Hartung, and the lobbying group CCIA Europe have voiced these concerns. CCIA Europe members include Alphabet, Meta, and Apple.

Brussels is not blinking. Eoghan O'Neill, a senior policy officer at the European Commission's AI Office, told the TNW Conference in Amsterdam on June 20 that the Commission planned to finalise its rules for general-purpose AI in July. The European Parliament would then adopt its position on the standards. "This is a big, sophisticated technology, and we want to get it right," he said. "We need specific obligations to capture some of the most impactful or potentially harmful models under the AI Act." O'Neill said the guidelines were drafted by a broad code of practice group. This included model providers, civic society organisations, NGOs, academics, AI safety experts, SMEs, and European industrial giants.

Not everyone in European tech sees the timing as the main problem.

Fabrizio Del Maffeo, CEO of Netherlands-based chip company Axelera AI, argued that the bloc's regulatory load stifles growth. "Europe is not the United States," he said. "We have many languages, many markets, and many regulations, both European and local. And these are stifling growth because they create borders, making it difficult for companies to expand." Del Maffeo said his company had signed the petition for "EU Inc", a proposal for a standardised legal entity. This would let startups operate more easily across member states, sitting under the bloc's 28th regime. Commission President Ursula von der Leyen said at Davos in January that the rules would combine "corporate law, insolvency, labour law, [and] taxation" in "one single and simple framework."

Del Maffeo also pointed at capital rather than policy. He said the focus on launching new startups needs balancing with scaling existing ones. He argued this requires money more than rules. The figures he cites are stark: Europe accounts for just 8% of the world's scaleups, against 60% in North America. No EU-founded startup in the past 50 years has passed a €100bn valuation. "If you look at machine builders, we are leading the world," he said. "In automotive, we are great, but we are losing traction. In robotics, we do great, but we are also losing traction."

Peter van der Putten, director of the AI Lab and lead scientist at software firm Pegasystems, made a similar case on investment. European startups raised about $52bn (€44bn) in venture capital last year, The Next Web reports. This is far below the $209bn (€177bn) attracted by their US counterparts. "Investment could come from the EU, but also from the US," van der Putten said. "Regulations could be adjusted to make it easier and more attractive for funding that's leaving the US to flow into Europe."

There is a counter-current. Elise de Reus, co-founder of Cradle, said European engineers are returning from Big Tech jobs in the US. They are drawn by purpose-driven work and quality of life. "We're welcoming European engineers who used to work at Big Tech companies like Facebook in the US to come back and contribute to solving societal and global problems such as climate change," she said. She added that Europe is "maybe a little bit too modest" and should not copy the American system wholesale. Whether that reverses the funding numbers is another question. The August 2 rules will not answer it on their own.