EU Considers Partial Halt to AI Act Amid US Pressure: What's at Stake?

EU Mulls Easing AI Laws: A Closer Look at Potential Delays

In a significant development, the European Union is considering a partial halt to its landmark Artificial Intelligence (AI) Act in response to pressure from the US government and major technology corporations. According to a report by the Financial Times, the European Commission plans to ease aspects of its digital rulebook, including the AI Act that took effect last year, as part of a “simplification package” slated for a decision on November 19.

If approved, the proposed suspension could grant generative AI providers currently operating within the market a one-year compliance grace period and delay the enforcement of fines for violations of AI transparency regulations until August 2027.

“When it comes to potentially delaying the implementation of targeted parts of the AI Act, a reflection is still ongoing,” the Commission’s Thomas Regnier told Cointelegraph, adding that the EC is working on a comprehensive digital law package to be presented on November 19.

EU's AI Act: A Brief Overview

The EU's AI Act entered into force in August 2024. The Commission initially proposed the legislation in April 2021 with the aim of establishing a risk-based AI classification system. Following approval by the European Parliament and the European Council in 2023, the AI Act came into effect in August 2024, with its provisions to be implemented gradually over the next six to 36 months.

According to the Financial Times, the bulk of provisions pertaining to high-risk AI systems, which pose “serious risks” to health, safety, or fundamental rights of citizens, are scheduled to take effect in August 2026.

Under the draft “simplification” proposal, companies violating rules related to the highest-risk AI applications could receive a one-year “grace period.”

Implications for Businesses and Innovation

The proposal remains subject to informal discussions within the Commission and with EU member states and may undergo changes prior to its potential adoption on November 19, the report noted.

“Various options are being considered, but no formal decision has been taken at this stage,” Regnier from the EC told Cointelegraph, adding: “The Commission will always remain fully behind the AI Act and its objectives.”

The EU’s potential suspension of sections of the AI Act highlights Brussels' evolving approach to digital regulation amid intensifying global competition from the United States and China.

Following the US's explicit ban on central bank digital currency (CBDC) development in early 2025, the European Central Bank accelerated its work on the digital euro, later stating that digital cash would not launch before 2029.