Citing damaging uncertainty and regulatory confusion, a coalition of over 45 top European companies is calling for a two-year delay to the EU’s landmark AI Act. The group, which includes industrial giants like Airbus and Mercedes-Benz alongside AI leader Mistral AI, sent an open letter to the European Commission on July 3.
They argue that with key compliance guidelines still unpublished, the act threatens to stifle innovation. The proposed “clock-stop” is needed, they say, to prevent harming Europe’s competitiveness and to allow time to simplify the complex rules before they take full effect.
The letter states that the traditional European balance between regulation and innovation is being disrupted, warning that this move escalates an already tense debate over the future of AI governance in the bloc:
“Unfortunately, this balance is currently being disrupted by unclear, overlapping and increasingly complex EU regulations. This puts Europe’s AI ambitions at risk, as it jeopardises not only the development of European champions, but also the ability of all industries to deploy AI at the scale required by global competition.”
Industry Giants Call for Two-Year ‘Clock-Stop’ on AI Act
The “EU AI Champions Initiative”, spearheaded by venture capital firm General Catalyst, is pushing for a significant pause. Their open letter explicitly urges a two-year “clock-stop” on the AI Act’s enforcement: “To address the uncertainty this situation is creating, we urge the Commission to propose a two-year “clock-stop” on the AI Act before key obligations enter into force, in order to allow both for reasonable implementation by companies, and for further simplification of the new rules.”
This delay would affect upcoming deadlines for general-purpose AI (GPAI) models, set for August 2025, and high-risk systems, scheduled for August 2026. The core problem, according to the signatories, is the absence of the AI Code of Practice, a critical document meant to guide companies on compliance.
Without these standards, businesses are left in the dark about how to implement the law’s requirements. The coalition, which also includes ASML, Siemens Energy, and TotalEnergies, argues this ambiguity jeopardizes Europe’s ability to compete on the global stage.
A Chorus of Concern: Transatlantic Tensions and Big Tech Pushback
The call for a delay is not happening in a vacuum. It reflects widespread anxiety that has been building for years. As far back as June 2023, a group of 150 European businesses warned that the AI Act was too burdensome and could drive innovation out of the EU.
This sentiment has been amplified by international players. The Trump administration recently lodged a formal objection to the draft AI Code of Practice, arguing it imposes excessive burdens. This intervention is part of a broader pattern of tech friction, including recent DMA fines against Apple and Meta that the White House called “economic extortion.”
Washington’s stance echoes criticisms from American tech giants. Meta previously described an early draft of the code as “unworkable,” while Google has also pushed back on its requirements. This growing chorus of opposition puts significant pressure on Brussels.
The Shifting Regulatory Landscape
Even as industry voices call for a pause, the AI Act is already partially in motion. The first major enforcement milestone arrived in February 2025, when bans on “unacceptable risk” AI systems—such as social scoring and predictive policing—officially took effect.
The European Commission has yet to formally respond to the call for a delay. However, EU tech chief Henna Virkkunen has promised to publish the much-anticipated AI Code of Practice before August 2025. Some political figures, like Swedish Prime Minister Ulf Kristersson, have sided with the industry, calling the rules “confusing”.
This creates a complex environment for any company deploying AI in Europe. The tech lobbying group CCIA Europe summarized the mood, highlighting the urgent need for legal clarity, sating that a “bold ‘stop-the-clock’ intervention is urgently needed to give AI developers and deployers legal certainty, as long as necessary standards remain unavailable or delayed.”
Microsoft’s Counter-Play: Pledging Allegiance to Europe
In a strategic move that appears to directly address these geopolitical and regulatory crosswinds, Microsoft has unveiled five “European Digital Commitments”. The announcement, detailed by President Brad Smith, is a clear attempt to build trust and position Microsoft as a steadfast partner for the continent.
Smith stated that Microsoft’s business is critically dependent on European trust. The most significant of these is a legally binding “European Digital Resilience Commitment.”
“We recognize that our business is critically dependent on sustaining the trust of customers, countries, and governments across Europe. We respect European values, comply with European laws, and actively defend Europe’s cybersecurity,” he said.
As part of this, Microsoft pledges to fight any government order to suspend its European cloud operations, with Smith referencing past legal battles with the U.S. government.
“In the unlikely event we are ever ordered by any government anywhere in the world to suspend or cease cloud operations in Europe, we are committing that Microsoft will promptly and vigorously contest such a measure using all legal avenues available, including by pursuing litigation in court.”
This pledge is backed by concrete investments. Microsoft plans a 40% expansion of its EU datacenter capacity and will reinforce its EU Data Boundary to ensure customer data remains within the region. The company is also appointing a Deputy CISO for Europe and reaffirming its support for open-source models from developers like Mistral AI. This strategy appears designed to reassure European customers that Microsoft is aligned with their values and regulatory priorities, regardless of pressure from elsewhere.
