Welcome to the EU AI Act Newsletter, a brief biweekly newsletter by the Future of Life Institute providing you with up-to-date developments and analyses of the EU artificial intelligence law.

Legislative Process

Commission publishes second draft of Code of Practice on marking and labelling of AI-generated content: The European Commission is facilitating a voluntary code of practice to help providers and deployers comply with Article 50 of the AI Act, which mandates marking and labelling of AI-generated content. This second draft incorporates feedback from hundreds of stakeholders, including industry, academia and civil society, gathered through surveys, meetings and workshops in January 2026, alongside contributions from Member States and European Parliament representatives. The revised code has been streamlined to reduce compliance burden whilst promoting open standards and an EU icon for labelling. The code comprises two sections: Section 1 addresses marking and detecting AI content for generative AI system providers, with enhanced flexibility and clarity; Section 2 targets deployers, focusing on labelling deepfakes and text on matters of public interest, adopting a more flexible and practice-oriented approach. Feedback on this draft is due by 30 March, with finalisation expected by early June 2026. The transparency rules become applicable on 2 August 2026.

Analyses

International AI Safety Report, key findings for the EU by lead writer Carina Prunkl: The 2026 International AI Safety Report was launched at the New Delhi AI Impact Summit. The Report was chaired by Yoshua Bengio and authored by 100+ independent experts, including an international panel with nominees from 30+ countries and international organisations. It provides a scientific assessment of general-purpose AI capabilities, risks and risk management. This makes the report highly relevant for EU institutions implementing the AI Act. It surveys a range of risks, including misuse (e.g. deepfakes, manipulation, cyberattacks, biosecurity), malfunctions (e.g. reliability failures and control challenges), and systemic risks (e.g. labour-market impacts and risks to human autonomy). The report points to rapid capability gains, especially in coding and science, alongside wide (if uneven) global deployment. It also notes rising deepfake-related incidents and that some developers added safeguards after concluding they could not confidently rule out assistance to novices in biological weapons development. At the same time, the report highlights growing challenges for reliable pre-deployment safety testing, in part because AI models now more frequently detect when they are being evaluated and exploit loopholes in tests. Together, these trends sharpen the report’s “evidence dilemma”: capabilities are advancing faster than the evidence base needed for effective governance.

Four Swedish founders comment on Sweden's AI strategy: Four Swedish founders Joel Hellermark, Johannes Schildt, Anton Osika and Fredrik Hjelm argued in an op-ed in Sifted that the strategic direction of the national AI strategy of Sweden is right: rather than competing with the US and China on foundation models, Europe should excel at applying them. However, they contend that ambitious government AI strategies across Europe frequently fail to produce tangible change. Sweden experiences brain drain as talented individuals relocate to San Francisco for higher returns and greater talent density, despite Sweden producing more tech unicorns per capita than most countries. They propose the following targeted reforms: an AI visa with two-week processing, competitive tax incentives for foreign talent, and streamlined bureaucratic procedures for international hires seeking housing and childcare. They also highlight fragmentation across Sweden’s 340 government agencies, 21 regions and 290 municipalities as obstacles during technological transitions. The AI Act creates a shared regulatory floor but does nothing to speed up implementation at the national level.

The case for a European Union digital enforcement authority: Mario Mariniello, Bruegel's Non-resident Fellow, wrote a policy brief arguing that the European Commission enforces the EU’s digital regulations but faces pressure to relax enforcement to avoid US retaliation. This creates risk of enforcement bias, which means either weakening oversight or unfairly penalising foreign competitors under the belief that this reduces EU technological dependence. Such bias undermines regulatory effectiveness and market competition. The policy brief examines whether delegating digital enforcement powers to an independent agency would improve outcomes. Independent EU agencies with significant enforcement and sanction powers already exist as precedent. The brief assesses whether increased enforcement accuracy justifies outsourcing enforcement and evaluates technical, political and legal feasibility. It concludes that structural separation of enforcement is unsuitable for the Digital Markets Act and Artificial Intelligence Act currently, but advisable for the Digital Services Act. Consequently, it recommends establishing an independent EU agency specifically to enforce the Digital Services Act, outlining its potential structure.

Recommendations on the Parliament amendments in the Digital Omnibus: Marcel Mir Teijeiro and Koen Holtman from The AI Standards Lab identified key concerns among the 750+ proposed amendments by the European Parliament. They oppose amendments excluding general-purpose AI model providers with systemic risk from responsibilities and oversight, which undermines the dual-use technology principle and creates loopholes. They also oppose amendments excluding certain high-risk AI systems from the Act’s scope, particularly those exempting business-to-business and internal AI uses, risking legal uncertainty and loopholes. They support preserving registration obligations in Article 6(4) and amendments aligning high-risk AI systems’ entry-into-force dates with Commission proposals. They oppose centralisation amendments concentrating oversight exclusively in the AI Office, citing capacity concerns, though recommending added Commission duties for adequate resourcing if pursued. Finally, they oppose proposed amendments on standards requests and common specifications, preferring existing versions.

Simplification for industrial AI rules? According to Maximilian Henning from Euractiv, ten EU countries, including Germany, France, Italy, Spain and Poland, called for clarification of how the AI Act interacts with a separate law on machinery and for realistic implementing deadlines for industrial AI. The Act, however, already specifies this interaction and carving out certain industrial AI uses. In the European Parliament, Centre groups made explicit simplification demands, building on the Commission proposal moving AI used in medical devices to a lighter regime. The European People’s Party seeks the same for all industrial sectors including machinery. The liberal Renew group, led by Svenja Hahn, proposes exempting industrial and business-to-business AI entirely. European Conservatives and Reformers push cutting rules for non-safety-related industrial AI systems. Together, these three groups nearly constitute a parliamentary majority. No substantial industrial AI changes appear in current Council draft compromise texts.