The European Commission has flatly rejected a high-profile demand from over 45 tech and industrial giants, including Airbus and Mistral AI, for a two-year freeze on the landmark EU AI Act. In a firm statement from Brussels on Friday, the EU’s executive body dismissed industry warnings that regulatory uncertainty could stifle innovation.
A Commission spokesperson confirmed there would be “no pause” on the legislation’s rollout. This decision solidifies the timeline, meaning crucial rules for general-purpose AI models are still set for August 2025, despite the powerful industry pushback.
Brussels Stands Firm: “No Pause” for AI Act Rollout
The message from Brussels was unambiguous. At a press conference, Commission spokesperson Thomas Regnier laid out the EU’s position. He stated, “Let me be as clear as possible, there is no stop the clock. There is no grace period. There is no pause.”, directly refuting the industry’s request for a grace period.
This firm stance means the established legal deadlines will be enforced without change. Obligations for general-purpose AI (GPAI) models will begin in August 2025. Following that, rules for high-risk systems are scheduled to take effect in August 2026.
Industry Demands ‘Clock-Stop’ Citing Regulatory Chaos
The Commission’s decision is a direct rebuttal to a major lobbying effort. A coalition of over 45 top European firms sent an open letter on July 3 demanding a significant delay. The group, spearheaded by the EU AI Champions Initiative, includes industrial giants like Siemens and AI leader Mistral AI.
They argued that the balance between regulation and innovation is being disrupted. “Unfortunately, this balance is currently being disrupted by unclear, overlapping and increasingly complex EU regulations.”, the letter stated, warning that the current situation puts Europe’s AI ambitions at risk. The core issue is the absence of the AI Code of Practice, a key guide for compliance.
Without these standards, businesses are left in the dark. The coalition urged the Commission to “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…”. The lobbying group CCIA Europe echoed this sentiment, stating 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.”, highlighting the urgent need for legal certainty.
For developers and startups, the lack of clear standards creates a chilling effect. The uncertainty makes it difficult to secure investment or allocate resources for AI projects targeting the EU market. Established players, while better resourced, face the costly challenge of retrofitting systems to comply with rules that are not yet fully defined.
A Chorus of Concern: Transatlantic Tensions and Big Tech Pushback
This call for a delay did not emerge in a vacuum. It reflects widespread anxiety that has been building for years. As far back as June 2023, 150 European businesses warned the AI Act was too burdensome and could drive innovation out of the EU.
These concerns have been amplified by international players. The Trump administration lodged a formal objection to the draft AI Code in April 2025, arguing it imposes excessive burdens. This move escalated an already tense debate over AI governance.
This transatlantic friction highlights a fundamental divergence in regulatory philosophy. The U.S. has historically favored a more hands-off, market-driven approach. In contrast, the EU’s AI Act, much like its GDPR, prioritizes fundamental rights and seeks to establish clear, preemptive guardrails for powerful technologies.
American tech giants have also pushed back. Meta previously described an early draft of the code as “unworkable,” while Google has also resisted its requirements. Meanwhile, the AI Act is already partially in motion, with bans on “unacceptable risk” AI systems taking effect in February 2025.
Microsoft’s Counter-Play: Pledging Allegiance to Europe
In a strategic move that cuts against the grain of industry pushback, Microsoft has positioned itself as a steadfast European partner. In April, the company unveiled five “European Digital Commitments” designed to build trust on the continent.
Microsoft President Brad Smith stated that the company’s success depends on European trust. “We recognize that our business is critically dependent on sustaining the trust of customers, countries, and governments across Europe.”, he said, emphasizing alignment with the bloc’s values and laws. This appears to be a direct attempt to reassure customers amid regulatory crosswinds.
The most significant pledge is a legally binding commitment to resist government pressure. Smith promised that “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…”. This is backed by a 40% expansion of its EU datacenter capacity and a reinforced EU Data Boundary to keep customer data within the region.
Microsoft’s strategy is a calculated geopolitical maneuver. By embracing regulations its American rivals are fighting, the company positions itself as a more reliable partner for European governments. This could translate into a competitive advantage, especially in public sector and critical infrastructure contracts.
