Stay in the know
We’ll send you the latest insights and briefings tailored to your needs
The EU has adopted the world’s first comprehensive AI-specific legal framework, the AI Act, which applies a risk-based approach calibrated to an AI system’s potential threat to health, safety and fundamental rights. This horizontal regime is supplemented by additional regimes for data protection, fair competition, civil liability and product safety, which provide additional safeguards ensuring safe AI use. The European Commission (EC) has been proactively exploring the application of competition law rules to the AI sector, recognising the importance of maintaining a competitive and fair market environment as technology and digital markets continue to evolve.
AI Strategy
The EU’s approach to artificial intelligence centres around the development of a risk-based regulatory framework that describes a 'European approach' to AI and various initiatives to promote Union development and deployment of artificial intelligence. Regulation remains a key pillar of this approach, though several indications of a shift towards a lighter regulatory touch have appeared in recent months.
Development of Regulation
In 2018, the European Commission announced its European AI Strategy centred around boosting AI capacity, preparing for socioeconomic changes and ensuring appropriate ethical and legal frameworks.
In 2021, the Commission then presented its 2021 AI package that included a proposal for a comprehensive risk-based regulatory framework on artificial intelligence which has since been adopted with certain provisions in force. However the Commission's 2025 Work Programme released in February 2025, proposes to simplify overlap between digital regulations, including the EU AI Act.
In line with the Work Programme, in September the Commission opened a call for evidence to collect input from stakeholders on how to simplify legislation in the Digital Omnibus, in particular on data, cybersecurity and artificial intelligence. According to the Apply AI Strategy, the EC intends to publish guidelines on this starting Q3 2026.
The EC is preparing a tech sovereignty package which is expected to be presented on April 15 and will include the new Cloud and AI Development Act, the revision of the European Chips Act (Chips Act 2.0), the EU’s open source strategy, and a strategic roadmap for digitalization and AI in energy that is set to include a new labelling scheme for data centres. The upcoming Data Centre Energy Package aims to make data centres climate-neutral by 2030 by setting performance indicators including energy and water efficiency, waste heat reuse and renewable energy consumption, to assess how much power consumption goes toward essential IT infrastructure.
Innovation and Adoption
In 2024, the Commission launched an AI innovation package that set out measures to support European startups and SMEs in the development of trustworthy AI. Similarly, in February 2025, the Commission announced its InvestAI initiative to mobilise EUR 200 billion investment into artificial intelligence including through establishing AI gigafactories.
This was underscored in April 2025, when the Commission launched its AI Continent Action Plan, which proposed further measures to promote an EU AI ecosystem that fosters innovation, including by facilitating data access for AI innovation, incentivising investment into supercomputing infrastructure and simplifying the compliance burdens imposed by the EU AI Act.
In October 2025, the EC launched the Apply AI Strategy aiming to enhance the competitiveness of strategic sectors and boost AI adoption and innovation. The framework identifies 10 key industry sectors, includes support measures to enable EU tech sovereignty, and the creation of a new governance system, the Apply AI Alliance, which brings together stakeholders to advise on policy actions.
In November 2025, EU Member States affirmed its commitment to digital sovereignty reinforcing autonomy and strategic control over digital infrastructure, data, and emerging technologies such as AI.
Helpful resources
|
The AI Act is the EU's horizontal regulatory framework that regulates AI systems and some AI models. Broadly speaking, it adopts a functional "risk-based" approach, with the degree of regulatory intervention depending on the function of the AI - the use to which it is to be put. The regulatory obligations are imposed on providers (developers) and deployers (users) of AI systems and apply to operators located both within and outside the EU, so long as the output from the AI system is used in the EU.
From consumer protection law to online safety, AI continues to stretch existing legal frameworks. See the latest updates below.
Managing Partner, Competition/Antitrust, Regulation and Trade, Brussels
Partner, Brussels and London
Senior Associate (Italy), London
Of Counsel, London
Partner, London
Partner, Milan
The contents of this publication are for reference purposes only and may not be current as at the date of accessing this publication. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.
© Herbert Smith Freehills Kramer 2026
We’ll send you the latest insights and briefings tailored to your needs