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EU Firm on AI Rules Timeline Despite Industry Calls for Delay

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The European Commission reaffirmed on Friday that it will adhere to the legal timeline for implementing the European Union’s groundbreaking Artificial Intelligence Act, rejecting recent appeals from major tech companies and some member states to postpone the rollout.

Key Points:

  • Major tech players including Alphabet (Google), Meta (Facebook), as well as European firms like Mistral and ASML, had urged the Commission to delay the AI Act by several years.

  • Commission spokesperson Thomas Regnier made clear at a press conference:

    • No pause, no grace period, and no stop-the-clock on the AI Act timeline.

    • Initial provisions took effect in February 2024.

    • Rules for general purpose AI models will begin enforcement in August 2024.

    • Requirements for high-risk AI models will start in August 2026.

  • The Commission indicated plans to simplify digital rules later this year, potentially reducing reporting obligations for smaller companies.

  • Concerns from companies center on the compliance costs and strict regulations, as the AI Act seeks to regulate a technology critical to sectors dominated by the US and China.

Microsoft to Cut Around 4% of Workforce Amid Heavy AI Investment Costs

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Microsoft announced it will lay off nearly 4% of its global workforce as part of efforts to control costs while investing heavily in artificial intelligence infrastructure. The company, with about 228,000 employees as of June 2024, had already begun layoffs in May affecting around 6,000 workers, primarily in sales roles.

The tech giant has pledged $80 billion in capital spending for fiscal year 2025, but the soaring costs of expanding AI capabilities have pressured profit margins. Microsoft’s cloud margin for the June quarter is expected to decline compared to the previous year.

In addition to workforce reductions, Microsoft plans to simplify its organizational structure by reducing management layers and streamlining products, processes, and roles. The gaming division, including its Barcelona-based King unit known for Candy Crush, will also see job cuts of about 10%, or roughly 200 employees.

Microsoft’s layoffs follow a broader trend among Big Tech companies investing in AI, with peers like Meta trimming about 5% of its lowest performers, Alphabet cutting hundreds of jobs, and Amazon reducing staff across various segments amid economic uncertainties and rising operational costs.

Korea’s SK Group and Amazon to Invest $5 Billion in Nation’s Largest AI Data Centre

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South Korea’s SK Group announced a $5.11 billion investment plan, including $4 billion from Amazon Web Services (AWS), to build the country’s largest data centre in Ulsan, the Science Ministry confirmed Friday. Construction will begin in September, with full operations expected by 2029, featuring a capacity of 100 megawatts.

SK Group Chairman Chey Tae-won expressed ambitions to expand the facility to one gigawatt eventually, aiming to position it as a global hub to meet domestic AI demands. President Lee Jae Myung, present at the announcement alongside tech industry leaders, emphasized AI’s critical role in South Korea’s growth and praised the project for spreading high-tech industry development beyond the metropolitan areas into provincial regions.

Following the announcement, South Korean AI-related stocks surged, with SK Hynix rising over 3%, Kakao jumping 11%, and LG CNS gaining 9%, helping the KOSPI index surpass 3,000 points for the first time in over three years.

The investment confirms earlier media reports this month about SK Group and AWS’s plans to build a major data centre in South Korea.