EU Considers Pausing AI Act Amid Big Tech and Trade Pressure

What happened

EU and U.S. policymakers are moving to soften parts of emerging AI rules after pressure from big tech and trade concerns. The European Commission is reportedly weighing a draft “Digital Omnibus” that would pause some high‐risk AI Act requirements and give companies a one‐year grace period for certain obligations starting after August 2027; a leaked version would also exempt narrow or procedural uses from mandatory registration. In the U.S., the White House’s AI Action Plan (July 2025) pushes against state‐level AI laws and earlier this year the Senate removed a House‐passed proposed 10‐year moratorium on state AI laws on 2025‐07‐01.

Why this matters

Policy shift — enforcement timelines and market strategy. The EU’s AI Act, in force since August 2024, had key duties for “high‐risk” systems scheduled from August 2026 onward; delaying or narrowing those duties changes when and how companies must comply. That affects:

• Market behaviour: firms may delay launches or defer compliance investments while rules are in flux.
• Competition: relaxed obligations could advantage large incumbents able to influence policy and absorb uncertainty, and disadvantage smaller developers who rely on clear, consistent rules.
• Risks to protections: enforcement delays could extend gaps in transparency, fairness and safety obligations that the Act aims to guarantee.

These moves also reflect geopolitical trade tensions: U.S. officials and firms argue strict EU rules could disadvantage American AI models internationally, and Washington is using federal leverage to limit a patchwork of state laws.

Sources

• Reuters — EU weighing pause for parts of AI Act (11 Nov 2025): https://www.reuters.com/business/eu-weighs-pausing-parts-landmark-ai-act-face-us-big-tech-pressure-ft-reports-2025-11-07/
• Reuters — leaked document on easing EU AI rules (11 Nov 2025): https://www.reuters.com/sustainability/boards-policy-regulation/big-tech-may-win-reprieve-eu-mulls-easing-ai-rules-document-shows-2025-11-07/
• Harvard Kennedy School (Berkman Klein / Ethics) — summary of White House AI Action Plan (July 2025): https://www.ethics.harvard.edu/news/2025/11/ai-governance-crossroads-americas-ai-action-plan-and-its-impact-businesses
• Responsible AI Foundation — timeline on global AI governance (summer 2025): https://www.responsibleaifoundation.com/post/global-ai-governance-updates-summer-2025-14-key-developments

(Brief based solely on the provided article and the sources it cites.)

• Grace period for certain EU AI Act high-risk obligations — 1 year (beginning after August 2027; proposed; EU)
• EU AI Act high-risk provisions enforcement start — August 2026 onward (planned timeline; EU)
• Proposed moratorium on U.S. state AI laws — 10 years (removed 2025-07-01; U.S.)
• Digital Omnibus proposal final version — Nov 19, 2025 (expected; EU)
• Confidence in regulatory easing/delay trend — 85/100 (current assessment; global)

• EU AI Act enforcement slippage and partial exemptions: The Commission may pause some high‐risk provisions and add a one‐year grace period after Aug 2027, delaying obligations due from Aug 2026 and possibly exempting narrow/procedural high‐risk uses from database registration—creating legal uncertainty and potentially favoring incumbents with compliance scale across EU high‐risk deployments. Turn this into opportunity by piloting voluntary audits/registrations and aligning early with anticipated rules—benefiting proactive EU operators, SMEs seeking trust signals, and compliance vendors.

• U.S. governance fragmentation and preemption whiplash: The White House AI Action Plan aims to discourage state AI laws via federal levers, but the Senate’s 2025‐07‐01 removal of a proposed 10‐year state moratorium restores state authority—raising compliance and product rollout complexity for multi‐state U.S. firms. Mitigate by building modular, state‐aware controls and engaging in federal standard‐setting to shape harmonization—benefiting multi‐state operators and RegTech providers.

• Known unknown: Scope and timing of EU delays/exemptions: Uncertainty persists on which high‐risk obligations are delayed versus already binding, with clarity hinging on the Digital Omnibus expected Nov 19, 2025, and on industry response; ambiguity risks misallocated compliance spend and stalled launches. Convert uncertainty into advantage via scenario plans (2026 readiness with 2027 grace triggers), continuous monitoring, and participation in consultations—benefiting firms timing feature releases and investors/compliance providers positioning solutions.

Depending on where you sit, this year’s regulatory pivot looks like overdue realism or a retreat in slow motion. Supporters frame the EU’s contemplated pause on high‐risk AI provisions and a one‐year grace window after August 2027 as aligning ambition with enforceability, while U.S. efforts to discourage “burdensome” state rules promise coherence over patchwork. Skeptics counter that the shifts follow pressure from Washington and tech giants, with leaked EU exemptions softening registration and transparency exactly where the AI Act’s teeth were meant to bite. A “grace period” for high‐risk AI can read like a grace period from accountability. Industry argues the status quo breeds legal uncertainty—Meta says so explicitly—yet delays and carve‐outs also prolong uncertainty for courts, standards bodies, and those waiting for privacy, fairness, and safety protections. Add the Senate’s rejection of a 10‐year state moratorium, and the net effect is a governance tug‐of‐war, not a steady hand. Key uncertainties linger: which obligations are already binding, which slip to the new timeline, and what the Nov. 19 Digital Omnibus will actually settle.

Here’s the counterintuitive through‐line: easing rules to speed innovation may slow it. Companies are already deferring launches until the fog lifts, and shifting timelines make compliance roadmaps harder—not easier—especially for smaller players facing incumbents with the lawyers and lobbyists to surf ambiguity. The near term likely looks like a “soft” EU environment in 2026–2027 and a U.S. split‐screen of federal discouragement versus resurgent states, with real impacts determined by the Omnibus outcome, early‐2026 preemption fights, and demand for audits, registries, and transparency tools. Watch who ships and who stalls after November, and who benefits if exemptions stick. In the end, the timeline is the policy.