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EU Hits Pause On Tough AI Regulations Amid Innovation Fears

Photo by Guillaume Périgois / Unsplash

The European Commission has proposed delaying and streamlining several major digital laws, including its flagship AI Act, in what officials call the “Digital Omnibus.”

The plan, which still requires approval from EU member states, would push back enforcement of the strictest rules for high-risk AI systems from August 2026 to December 2027.

The shift reflects growing concern in Europe that heavy regulation is stifling innovation and widening the gap with the United States, where President Donald Trump’s tech-friendly administration has embraced a lighter regulatory approach.

EU leaders now fear losing ground in the global AI race and are prioritizing growth and “digital sovereignty” by easing compliance burdens on European companies.

The Commission says the revised plan will offer a more “innovation-friendly” framework while maintaining safety standards.

But critics see the move as a retreat from Europe’s long-standing emphasis on strong AI oversight just as the U.S. accelerates its own pro-industry strategy.

Also read this report by TechnoMetrica:

The Hidden Cost of AI Regulations: A Survey of EU, UK, and U.S. Companies
Executive Summary Artificial intelligence (AI) is reshaping how small technology businesses compete and grow. For startups, scaleups, and micro, small, and medium-sized enterprises (MSMEs), it is not only a tool to cut costs and improve efficiency, but also a driver of innovation, new business models, and market expansion. Small tech startups, the backbone of the

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