TL;DR
The EU is weakening GDPR and delaying AI Act enforcement to remain competitive, whilst the US Congress has proposed legislation that would prevent individual states from regulating AI at all. Both moves signal a global retreat from AI oversight as tech companies pour unprecedented sums into development.
A Tale of Two Deregulations
The hundreds of billions of dollars flowing into artificial intelligence development are fundamentally reshaping regulatory approaches on both sides of the Atlantic. In Brussels, the European Commission has unveiled its “digital omnibus” package, which aims to streamline tech rules including GDPR, the AI Act, and the ePrivacy directive.
The proposed changes would make it significantly easier for technology firms to use personal data for AI training without obtaining explicit consent. The Commission has also confirmed plans to delay implementation of central components of the AI Act, which came into force in August 2024 but has yet to fully apply to companies.
Former Italian Prime Minister Mario Draghi had warned a year ago that Europe had fallen behind the US and China in innovation, particularly in emerging technologies like AI. The new regulatory approach suggests Brussels has taken that warning to heart.
Washington Goes Further
The United States is taking an even more aggressive stance on deregulation. Language included in the yearly National Defense Authorization Act would direct the federal government to actively block state-level AI regulation. Under the proposed terms, the Justice Department would sue individual states—likely California and Colorado—that attempt to impose their own AI oversight.
President Trump has drafted an executive order pursuing similar objectives, whilst framing his position in characteristically direct terms: “You can’t go through 50 states. You have to get one approval. Fifty is a disaster.”
More than 200 state-level representatives and senators have published a letter opposing the measure, arguing it allows AI’s potential harms to go unchecked whilst impinging on state sovereignty.
Looking Forward
The regulatory race to the bottom creates significant uncertainty for businesses implementing AI. Organisations operating across multiple jurisdictions may find themselves navigating an increasingly fragmented landscape where oversight varies dramatically by location. For UK businesses, this shift demands careful attention to evolving compliance requirements whilst maintaining robust internal governance frameworks.
Source: The Guardian