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Andreas Cleve, CEO of Corti, expresses concerns that the EU’s new AI Act could impose hefty compliance costs, acting as a “tax” on small enterprises. While he acknowledges the need for regulation, he fears it might stifle innovation in Europe’s emerging AI industry.

The AI Act requires significant financial and time investments for compliance, with costs potentially reaching six figures for mid-sized companies. These expenses, coupled with the effort to understand and implement the regulations, pose a daunting challenge for many tech start-ups.

The AI Act, effective from August 2024, aims to position the EU as a global leader in trustworthy AI. It categorizes AI systems by risk levels and imposes varying degrees of regulation, from minimal for spam filters to stringent for high-risk applications like biometric identification.

Critics argue the Act is rushed and lacks essential details, creating uncertainty for businesses. The need for additional secondary legislation and the establishment of the AI Office to provide clarity are ongoing challenges, with concerns over bureaucratic delays and talent acquisition.

Despite criticism, EU officials assert that the Act will foster innovation by setting clear rules and allowing for real-world testing. However, entrepreneurs worry that Europe’s stringent regulations might hinder its competitiveness in the global AI race, emphasizing the need for a balance between regulation and support for tech growth.

Please visit the financial times article for more information.