EU AI innovation package aims to boost startups and SMEs

The goal of the Commission’s ‘innovative AI strategy’ is to boost startups and small & medium-sized enterprises (SMEs) operating in the AI field. The package contains different measures such as providing special access to supercomputers to allow start-ups to train their AI models; setting up an EU AI office to coordinate AI policy; and building so-called AI ‘factories’.

“This is part of a wider concept, the so-called ‘Digital Europe Programme’, which is currently projected to run until 2027,” said Nils Rauer, global co-lead on AI at Pinsent Masons. “This programme is aimed at accelerating the digital transformation of the European economy, industry, and society. It shall also improve the competitiveness of Europe in the global digital economy.”

Powers to establish the new AI ‘factories’ will be created by way of an amendment to the European High Performance Computing (EuroHPC) Regulation 2021/1173 of July 2021.  Activities will include operating AI-dedicated supercomputers; supporting the AI startup and the scientific community in algorithmic development; and enabling the development of emerging AI applications based on general-purpose AI models. The EU is developing advanced supercomputing capabilities and establishing a public network of interconnected supercomputers across the entirety of Europe, according to a press release.

“The idea of opening up the processing power of EU supercomputers to help AI start-ups train large language models goes in the right direction. However, the devil will as always be in the fine print, and in the amount of red tape linked to that access. One of the strings attached to that access is a subscription to the AI Pact, a set of voluntary industry commitments meant to mimic the AI Act ahead of its entry into force,” said Wesley Horion, a technology law expert of Pinsent Masons.

The Commission is also keen on fostering the development of generative AI throughout multiple types of industries including robotics, healthcare, and biotechnologies. Additionally, the EU is striving to strengthen its generative AI talent pool through education, training, skill-sharpening and reskilling activities.

Generative AI is a broad technology that can be used and accessed for many different objectives, from health purposes to smart city planning, as well as meteorology and space and military applications. It can transform the way humans and machines interact and boost efficiency across value chains and organisational functions, creating new opportunities for economic activities.

“The EU already has a strong foundation for AI innovation, which includes a growing number of startups, as well as high-quality education and research centres. This environment supports the use of AI in various industries,” Horion said.

“The policy objective is to help AI start-ups and scale-ups overcome the huge funding gap vis-à-vis their US counterparts – however, this might be better achieved by working towards the completion of the Capital Markets Union than by pulling on already strained public R&D budgets,” Rauer added.

“With the region’s growing start-up scene now focusing on generative AI, a need for increased investment is emerging more than ever. The Commission has decided to make an attractive proposition to AI start-ups by essentially bundling together several existing initiatives and pieces of regulation such as the EuroHPC Regulation, Data Act and Data Spaces. It has also planned to provide financial assistance through programs such as Horizon Europe and InvestEU. Additionally, the EU is close to adopting the world's first comprehensive regulatory framework for trustworthy AI - the AI Act,” Horion said.

The EU is also launching "GenAI4EU," an initiative to encourage the use of generative AI across strategic industrial ecosystems and supporting the development of key applications leveraging generative AI in areas such as robotics and healthcare.