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European VCs and Tech Firms Sign Open Letter Warning Against Over-Regulation of AI in Draft EU Laws

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Major tech founders, CEOs, VCs and industry giants across Europe have signed an open letter to the EU Commission, warning that Europe could miss out on the generative AI revolution if the EU passes laws stifling innovation.

Executives from 150 businesses, including Germany’s Siemens and France’s Airbus, highlighted the risks of tight regulation, saying the rules could threaten the ability of European companies to compete in AI, while also failing to deal with the potential challenges.

The open letter (reproduced below) states that AI offers the “chance to rejoin the technological avant-garde” but that current regulatory proposals at the EU level could tip-over into stifling the opportunities.

Among European industry giants, the letter also includes signatures from major European startups and investors including Blablacar, Criteo, Felix Capital, OneRagtime VC, Ynsect, Elaia Partners, Mistral AI, GetYourGuide, Ventech, wefox, Atomico VC and La Famiglia VC.

The letter, sent on Friday to the European Commission, the parliament and member states, says: “In our assessment, the draft legislation would jeopardise Europe’s competitiveness and technological sovereignty without effectively tackling the challenges we are and will be facing.”

The EU has spent almost two years working on draft proposals (the Artificial Intelligence Act) that will serve as the basis for negotiations between member states and the European Commission, but could make the jurisdiction the toughest in the world in which to operate AI platforms, say critics.

The demands for regulation has ramped up in the last eight months since the launch of OpenAI’s ChatGPT chatbot and have fueled fears amongst some European governments — such as Italy, which banned the use of GhatGPT — that generative AI would lead to a wave of new problems around privacy, among other issues.

However, the signatories, which also include carmaker Renault and brewer Heineken, argue that the proposed laws might “heavily” regulate foundational AI models “regardless of their use cases.”

The letter argues that compliance costs and liability risks could be disproportionate, forcing companies and investors to leave the EU in order to take advantage of new AI innovations, and creating a “critical productivity gap” with the U.S.

Signatories argue that Brussels regulators should create law that is limited to “rigid compliance” rather than “broad principles in a risk-based approach,” meaning Europe will be forced to “stay on the sidelines” of the new AI era.

The companies are calling for the formation of an EU regulatory body, comprised of industry experts, that can monitor how new laws are applied and take into account new technological advances.

The letter has been criticized by Dragoș Tudorache, an MEP involved in drafting the laws, who said that larger companies were being lobbied by an “aggressive few.”

In a statement to TechCrunch, a spokesperson for the letter, Jeannette zu Fürstenberg of La Famiglia, said: “In all its complexity, the upcoming AI revolution will significantly shape the future of every continent. We have long been discussing the lack of technological leadership in Europe, and now is the time to take action. We have come to the conclusion that the AI Act, in its current form, has catastrophic consequences for European competitiveness.”

“We are currently witnessing a lot of European talent giving up leading positions at US tech companies to develop European technology. This spirit of innovation is in jeopardy,” she added.

Source : TC

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