The abandonment significantly tightens the timeline to avoid legal uncertainty, since new rules for high-risk AI applications are set to kick in this August. EU legislators had rushed to meet an informal end-of-April deadline to agree on delaying those rules.
The talks derailed over a request by the center-right in Parliament, backed by Germany, to allow key products, such as machinery and medical devices, to comply with AI requirements under sectoral law rather than the AI Act.
German top officials, including Chancellor Friedrich Merz, are pushing for less strict rules for industrial AI, in a bid to give engineering firms such as Siemens and Bosch a boost.
Center-right lawmakers doubled down on an exemption for industrial AI after talks collapsed. “Parliament’s proposal is clear: remove industrial AI from the AI Act and apply sector-specific laws to end double regulation,” said German liberal lawmaker Svenja Hahn.
Hahn said it was “unacceptable” that the Cypriot presidency of the Council, which led negotiations for EU countries, “was not willing to make a substantial compromise.”
But the plan is strongly opposed by several EU countries and also by the center-left, which accused the center-right European People’s Party (EPP) of siding with the far-right to postpone talks.