EU countries, lawmakers strike provisional deal on watered-down AI rules
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EU countries, lawmakers strike provisional deal on watered-down AI rules

Published by Global Banking & Finance Review

Posted on May 7, 2026

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· Last updated: May 7, 2026

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EU countries, lawmakers clinch provisional deal on watered-down AI rules

Overview of the EU AI Act Agreement

By Foo Yun Chee

BRUSSELS, May 7 (Reuters) - EU countries and European Parliament lawmakers on Thursday agreed to watered-down landmark artificial intelligence rules, including delaying their implementation, in a move which critics say shows Europe caving to Big Tech.

The tentative agreement, which needs to be formally endorsed by EU governments and the European Parliament in the coming months, came after nine hours of negotiations.

Support for Businesses and Administrative Cost Reduction

"Today's agreement on the AI Act significantly supports our companies by reducing recurring administrative costs," Marilena Raouna, Cyprus's deputy minister for European affairs, said in a statement. Cyprus currently holds the rotating EU Council presidency. 

Key Changes and Simplification Drive

Phased Implementation of AI Act

The changes to the AI Act, which entered into force in August 2024 with key elements to be enforced in stages, are part of the European Commission's push to simplify a slew of new digital rules.

The simplification drive came after businesses complained about overlapping regulations and red tape that hamper their ability to compete with U.S. and Asian rivals.

Delays and Exclusions in AI Regulations

Delay of High-Risk AI Rules

EU governments and lawmakers agreed to delay rules on high-risk AI systems such as those involving biometrics or related to critical infrastructure and law enforcement to December 2, 2027 from a previous deadline of August 2 this year.

Exclusion of Machinery from AI Act

They also agreed to exclude machinery from the AI Act as it is already subject to sectoral rules, ceding to pressure from businesses.

Specific Provisions and Bans

Ban on Unauthorised Sexually Explicit AI Content

There was also agreement on a ban on AI practices which create unauthorised sexually explicit images, a move responding to such content generated by Elon Musk's xAI ​chatbot Grok on ​X and sexually intimate deepfakes produced by Grok. The ban will apply from December 2.

"By the end of this year everyone, but especially women and girls will be safe from horrific nudifier apps being widely available on the EU market. Today we put a clear end to this kind of violence against people and children," said Dutch lawmaker ​Kim van Sparrentak.

Mandatory Watermarking of AI Output

Mandatory watermarking of AI generated output will apply from December 2.

Global Impact and Remaining Stringency

The AI rules, which were triggered by concerns about the impact of the technology on children, workers, companies and cybersecurity, are still considered the strictest in the world even after the changes.

(Reporting by Foo Yun Chee; Editing by Jacqueline Wong and Lincoln Feast.)

Key Takeaways

  • Implementation of high‑risk AI rules postponed: stand‑alone systems now due by 2 Dec 2027, embedded systems by 2 Aug 2028 (consilium.europa.eu)
  • Delays justified due to lack of finalized technical standards, which are expected only by December 2026 (computerworld.com)
  • Negotiators made concessions on SMEs and governance to streamline compliance under the Digital Omnibus package (consilium.europa.eu)

References

Frequently Asked Questions

What have EU countries and lawmakers agreed on regarding AI rules?
They have reached a provisional deal on diluted artificial intelligence regulations, including delayed implementation.
Why were the EU AI rules watered down?
The rules were diluted following pressure from some governments and businesses.
Who announced the provisional agreement on AI rules?
Cyprus, representing the rotating EU Council presidency, announced the agreement.
What does the provisional agreement on AI rules aim to do?
It aims to streamline and simplify certain rules regarding artificial intelligence.

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