European AI companies grapple with rigid rules, funds

The EU Artificial Intelligence Act, scheduled to take effect on August 2, 2026, will require startups to allocate significant resources to comply with its requirements, especially for ‘high-risk’ AI applications. A recent survey by Atomico, an early-stage venture capital firm that has backed companies like Stripe, Klarna, and Skype, revealed that a sixth of the value created by European startups is lost due to US relocation and this migration contributes to a loss of talent, knowledge, capital, and economic output within Europe.