A technical meeting on the EUs AI regulation broke down on Friday (10 November) after large EU countries asked to retract the proposed approach for foundation models. Unless the deadlock is broken in the coming days, the whole legislation is at risk.
The AI Act is a landmark bill to regulate Artificial Intelligence following a risk-based approach. The file is currently in the last phase of the legislative process, with the main EU institutions gathered in so-called trilogues to hash out the final dispositions of the law.
Foundation models have become the sticking point in this late phase of the negotiations. With the rise of ChatGPT, a popular chatbot based on OpenAIs powerful GPT-4 model, EU policymakers have been wondering how best to cover this type of AI in the upcoming law.
At the last political trilogue on 24 October, there seemed to be a consensus to introduce rules for foundation models following a tiered approach, namely, introducing tighter rules for the most powerful ones bound to have more impact on society.
This approach, which goes along similar lines to the Digital Markets Act (DMA) and Digital Services Act (DSA), was seen as a concession from the side of the European Parliament, which would have preferred horizontal rules for all foundation models.
The point of the tiered approach was to put the harshest obligations on the leading providers that currently are non-European companies. However, this approach has faced mounting opposition from large European countries.
On Sunday, the Spanish presidency circulated a first draft that put the tiered approach black-on-white for internal feedback. The European Parliaments co-rapporteurs replied with some modifications on Wednesday, maintaining the overall structure of the provisions.
However, at a meeting of the Telecom Working Party on Thursday, a technical body of the EU Councils of Ministers, representatives from several member states, most notably France, Germany and Italy, pushed against any type of regulation for foundation models.
Leading the charge against any regulation for foundation models in the AI rulebook is Mistral, a French AI start-up that has thrown the gauntlet to Big Tech. Cedric O, Frances former state secretary for digital, is pushing Mistrals lobbying efforts, arguing that the AI Act could kill the company.
Meanwhile, Germany is being pressured by its own leading AI company Aleph Alpha, which Euractiv understands has very high-level connections with the German establishment. All these companies fear the EU regulation might put them on a back foot compared to US and Chinese competitors.
Despite efforts from the Spanish presidency to broker an agreement with the European Parliament, faced with these strong stances from political heavyweights, the Spaniards proposed a general rethinking of the dispositions on foundation models.
Pressed for one hour and a half about the reason for such a change of direction, the arguments advanced included that this tiered approach would have amounted to a regulation in the regulation, and that it could jeopardise innovation and the risk-based approach.
The European Commission originally proposed the tiered approach, which would have seen the EU executive in the driving seat of enforcing on foundation models. However, the Commission did not defend it during the technical meeting.
The European Parliaments representatives ended the meeting two hours earlier because there was nothing else to discuss. Euractiv understands that regulating foundation models is a red line for the parliamentarians, without which an agreement cannot be reached.
The ball is now in the Councils court to come up with a proposal, a parliamentary official told Euractiv under the condition of anonymity, stressing that the presidency did not have an alternative solution to the tiered approach.
A second EU official also told Euractiv anonymously that the presidency is trying to convince reluctant member states, which are against regulating systemic actors at the model level but not at the system level.
At the same time, Euractiv understands that a growing faction inside the most reluctant member states is opposing the AI Act as a whole, considering it overregulation. Indeed, if no solution is found soon, the entire law might be at risk.
The EU policymakers were expected to close a political agreement at the next trilogue on 6 December, which means that landing zones for the most critical parts should be more or less in sight by the end of November.
If no agreement is reached in December, the outgoing Spanish presidency would have no incentive to continue the work at the technical level, and the upcoming Belgian presidency would have only a few weeks to tie up the loose ends of such a complex file before the European Parliament is dissolved for the EU elections next June.
Moreover, a general rethinking of the approach to foundation models would also require a deep revision of the regulations governance architecture and dispositions for responsibilities alongside the AI value chain, for which there might simply not be enough time.
When the AI Act was proposed in April 2021, the EU had a first-mover advantage in setting the worlds international standard for regulating Artificial Intelligence. As the hype on AI has grown, policymakers in the US, UK and China have become increasingly active.
Failing to agree on the EUs AI rulebook under this mandate would not only make lose momentum, but it would also result in Brussels losing ground compared to other jurisdictions.
The Telecom Working Party is due to meet again next Tuesday. Another technical meeting is scheduled among the EU co-legislators on the same day. Euractiv understands negotiations have now been escalated at the highest political level to break the deadlock.
The AI Act is on the line now, a third EU official told Euractiv. Its now or never.
[Edited by Nathalie Weatherald]
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EU's AI Act negotiations hit the brakes over foundation models - EURACTIV
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