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EU Digital Chief Margrethe Vestager Says AI Act Enhances Innovation

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The European Union’s (EU) competition and digital chief, Margrethe Vestager, has come forward to defend the EU’s landmark law on artificial intelligence (AI).

Following criticism of the Artificial Intelligence Act, Vestager argued that the proposed act will provide “legal certainty” for tech startups building AI technology, the Financial Times (FT) reported Friday (Dec. 29).

The legislation aims to establish clear rules for the development of foundation models, which are crucial for generative AI products, according to the report.

Vestager told the FT that the AI Act will not hinder innovation and research but rather enhance them, the report said. By providing a clear framework, the legislation ensures predictability and legal certainty in the market.

Startups working on foundational models, as well as those planning to apply them, will have a well-defined set of rules to follow, Vestager said, per the report. This clarity will enable them to navigate the regulatory landscape effectively and make informed decisions regarding their AI technologies.

Vestager acknowledged the importance of avoiding regulatory overreach to foster innovation and research, according to the report. The AI Act strikes a balance by offering guidelines and regulations without stifling technological advancements. By promoting a supportive environment, the legislation aims to encourage European tech companies to continue investing in AI development.

European companies may face disadvantages compared to their U.S. counterparts, such as limited access to venture capital, Vestager said, per the report. Therefore, regulation alone is not the answer, but rather a means to create trust in the market and attract investment.

French President Emmanuel Macron is among those who have criticized the AI Act, expressing concerns that it may put European tech companies at a disadvantage compared to their U.S. and Chinese counterparts, according to the report. Macron argued that excessive regulation could impede Europe’s ability to produce and innovate.

Concerns like these have prompted early discussions in France, Germany and Italy to seek alterations or prevent the law from being passed, the report said.

However, the two-tier approach introduced in the AI Act, imposing different requirements for general-purpose AI models and those in sensitive sectors like healthcare, aims to strike a balance between regulation and flexibility, per the report.

The AI Act officially reached provisional status on Dec. 8 but still needs to be approved before officially entering into law. It will go into effect two years after being approved.