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EU Considers Pausing Parts of Landmark AI Act Amid Pressure from U.S. and Big Tech

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The European Commission is considering pausing parts of its landmark Artificial Intelligence Act, following growing pressure from U.S. officials and major tech companies such as Meta and Alphabet, the Financial Times reported on Friday.

According to the report, the move comes after months of lobbying from Silicon Valley giants and warnings from the Trump administration that strict EU regulations could strain transatlantic trade relations.

A senior EU official told the FT that Brussels has been “engaging” with Washington on potential adjustments to the AI Act and related digital regulations as part of a broader simplification effort, which is expected to be adopted on November 19.

The AI Act, which became law in August 2024, is the world’s first comprehensive framework to regulate artificial intelligence technologies. It categorizes AI systems by risk level — from minimal to unacceptable — and imposes restrictions on areas like facial recognition, biometric surveillance, and generative AI transparency.

While a European Commission spokesperson had previously dismissed calls for delays, officials are now reportedly weighing temporary pauses for specific provisions, particularly those affecting companies developing large AI models.

An EU spokesperson told the FT that “various options” are being discussed but emphasized that the bloc remains “fully behind the AI Act and its objectives.”

The proposal reflects Europe’s balancing act between maintaining AI safety and innovation leadership while addressing geopolitical and trade pressures from the United States and industry stakeholders.

OpenAI and Anthropic may use investor funds to settle AI copyright lawsuits – FT

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OpenAI and Anthropic are reportedly considering using investor funds to help cover potential multibillion-dollar settlements linked to ongoing AI copyright lawsuits, according to the Financial Times. Several lawsuits filed by authors, publishers, and media companies accuse major tech firms — including OpenAI, Microsoft, and Meta — of using copyrighted materials without permission to train their AI models.

The report said OpenAI has arranged insurance coverage of up to $300 million through Aon for emerging AI-related risks, though some sources claimed the actual figure is “significantly lower.” Experts said such coverage is still far short of the amount needed to offset massive legal liabilities.

Aon’s head of cyber risk, Kevin Kalinich, told the FT that the insurance industry currently lacks “enough capacity” to adequately protect AI model providers. As a result, OpenAI has discussed self-insurance options, including setting up a captive fund to ringfence investor capital against potential future claims.

Anthropic, meanwhile, is also using internal funds to prepare for possible settlements. Last month, a U.S. federal judge preliminarily approved a $1.5 billion class-action settlement involving authors’ copyright claims against Anthropic.

Neither company has publicly commented on the report, and Reuters could not independently verify the details. The cases highlight the growing legal and financial challenges facing leading AI developers as governments and creators push back on data use practices.

Universal and Warner Music Close to Striking Landmark AI Licensing Deals

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Universal Music Group (UMG) and Warner Music Group (WMG) are reportedly on the verge of signing major artificial intelligence licensing agreements that could reshape how music is used and monetized in the AI era, according to a Financial Times report published Thursday.

Sources familiar with the discussions said that both music giants could finalize their deals within weeks, as they negotiate with a mix of AI start-ups and major tech companies.

Among the start-ups in talks are ElevenLabs, Stability AI, Suno, Udio, and Klay Vision. The labels are also in advanced discussions with industry heavyweights such as Alphabet’s Google and Spotify, according to the report.

Neither Universal, Warner, Google, nor Spotify immediately responded to Reuters’ requests for comment.

TOWARD A NEW MUSIC-AI BUSINESS MODEL

The potential deals represent a pivotal moment for the music industry, which has long battled unauthorized AI-generated content and the use of copyrighted works to train generative models. If completed, the agreements would establish a formal licensing framework allowing AI firms to access and use songs legally — for both music generation and AI model training.

Negotiations have reportedly focused on creating a payment system modeled after music streaming royalties, where every use or AI-generated playback of a song would trigger a micropayment to rights holders.

LEGAL AND ETHICAL PRESSURES ON AI FIRMS

The rise of generative AI has fueled a surge in lawsuits from artists and rights holders, accusing companies of using copyrighted material without consent or compensation. These potential licensing deals could help defuse legal tensions while providing a new revenue stream for record labels.

AI companies like ElevenLabs and Suno have been pushing the boundaries of voice synthesis and music generation, raising ethical questions about authorship and originality. By formalizing partnerships with major labels, these firms could legitimize AI-created music and ensure artists receive compensation.

A LANDMARK SHIFT FOR THE INDUSTRY

If finalized, these agreements would mark the first large-scale AI licensing model in the global music industry — a step that could influence how other creative sectors handle the intersection between AI and copyright.

Music industry observers say such deals could become a template for balancing innovation with intellectual property protection, ensuring that the creative ecosystem adapts rather than resists AI’s growing influence.