European venture capitalists and IT companies sign a letter cautioning against over-reglementing AI under proposed EU rules.

Europe\’s leading IT entrepreneurs, CEOs, VCs, and business titans have signed an open letter to the EU Commission warning that if the EU imposes policies that stifle innovation, Europe may miss out on the generative AI revolution.

Executives from 150 companies, including Siemens of Germany and Airbus of France, emphasised the risks of strict regulation, claiming that the laws might endanger European companies\’ capacity to compete in AI while also failing to address potential obstacles.

According to the open letter, AI presents the \”chance to rejoin the technological avant-garde,\” but existing regulatory plans at the EU level risk restricting the prospects. The letter is copied below.

The letter also included the signatures of significant European startups and investors, such as Blablacar, Criteo, Felix Capital, OneRagtime VC, Ynsect, Elaia Partners, Mistral AI, GetYourGuide, Ventech, wefox, Atomico VC, and La Famiglia VC, in addition to signatures from European industrial giants.

\”In our assessment, the draught legislation would jeopardise Europe\’s competitiveness and technological sovereignty without effectively tackling the challenges we are and will be facing,\” reads the letter, which was delivered on Friday to the European Commission, the parliament, and member states.

The Artificial Intelligence Act is a draught proposal that the EU has been working on for nearly two years. It will be the basis for negotiations between member states and the European Commission, but detractors claim that it might make the EU\’s legal system the most restrictive in the world for operating AI platforms.

Since the release of OpenAI\’s ChatGPT chatbot eight months ago, there have been more calls for regulation, which has increased concerns among some European governments — including Italy, which forbade the use of GhatGPT — that generative AI would cause a wave of new problems involving privacy, among other issues.

The signatories, which also include the automaker Renault and the brewer Heineken, assert, however, that the new legislation \”heavily\” control fundamental AI models \”regardless of their use cases.\”

The letter makes the case that excessive compliance costs and liability risks may drive businesses and investors outside of the EU in order to benefit from recent advancements in AI, resulting in a \”critical productivity gap\” with the US.

By insisting on \”rigid compliance\” over \”broad principles in a risk-based approach,\” signatories contend that Brussels authorities will force Europe to \”stay on the sidelines\” of the new AI era.

The businesses are urging the creation of an EU regulatory agency made up of business professionals that can keep track of how new regulations are being put into practise and take new technological developments into consideration.

Dragoș Tudorache, an MEP engaged in the regulations\’ drafting, criticised the letter, claiming that larger firms were being lobbied by a \”aggressive few.\”

A representative for the letter, Jeannette zu Fürstenberg of La Famiglia, said in a statement to TechCrunch: \”In all its complexity, the impending AI revolution will profoundly influence the destiny of every continent. It\’s time to move on the issue of Europe\’s lack of technology leadership, which has been a topic of discussion for a while. We have come to the conclusion that the AI Act, as it currently stands, has disastrous effects on the competitiveness of Europe.\”

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