The European Union on Wednesday abruptly dropped three draft rules on tech regulation, including artificial intelligence (AI) liability, amid intense opposition from Big Tech and telecom industries.
The AI Liability Directive, which has been around since 2022, would have updated EU product safety rules to cover AI and automation, allowing consumers to sue for compensation for harm.
“No foreseeable agreement — the Commission will assess whether another proposal should be tabled or another type of approach should be chosen,” the EU said.
Another proposal to fortify EU rules around online tracking technologies modeled after the General Data Protection Regulation (GDPR) law was withdrawn after co-legislators failed to reach agreement. The plan would have subjected Meta Platforms Inc.’s WhatsApp and Microsoft Corp. unit Skype to the same strict rules faced by telecoms over users’ privacy.
A third plan to regulate patents used in technologies for telecom equipment, mobile phones, computers, connected cars, and smart devices – opposed by Nokia, Ericsson, and Siemens – was also ditched.
Conversely, the EU said it is considering several plans as part of a 2025 program that accelerates AI development through an Innovation Act, Cloud and AI Development Act, AI Continent Action Plan, and Apply AI strategy.
The cascade of actions, on the heels of two significant AI infrastructure initiatives in Europe announced this week, offered a stunning reversal from the continent’s previously strident stance on regulating tech and AI in particular.
Earlier this week, French President Emmanuel Macron pledged $112 billion of private investment in “coming years” to fast-track AI development on the continent. And on Tuesday, the EU unveiled InvestAI, a $206.6 billion initiative that includes a new European fund of $20.7 billion for AI giga factories.
Europe’s evolving posture in what increasingly has become a global AI land grab comes after President Donald Trump last month unfurled Stargate, a $500 billion AI infrastructure plan over four years in the U.S. backed by OpenAI, SoftBank, and Oracle Corp. Macron referenced Stargate as an inspiration for France’s plan.
The Trump administration has made its intentions clear on AI, with a newly appointed czar, promises of hefty investments and a hands-off policy. To underscore that latter point, Vice President JD Vance told AI summit attendees in Paris that regulation stands in the way of unfettered AI systems development. He pressed European nations to back off “excessive regulation” that “could kill a transformative industry just as it’s taking off.”
“The Trump administration will ensure that the most powerful AI systems are built in the U.S. with American design and manufactured chips,” Vance said in his first foreign address on Tuesday.
“I’m here to talk about AI opportunities,” he said. “The AI future is not going to be won by hand-wringing about safety.”
