The EU must free open source from the constraints of the AI Act
On February 2, 2025, the AI Act entered a new EU phase. AI systems with unacceptable risks are now prohibited, and there is a regulation that people who work with AI systems must have the necessary AI skills. These are certainly sensible measures, but they do not answer the big question: How should companies in the EU compete against the all-powerful AIs from the USA or China in the future?
The answer must be: open source. There are hardly any companies in Europe that can keep up with US and Chinese providers. Mistral AI is struggling to gain a foothold in a market dominated by OpenAI, Anthropic, Google and Co., Silo AI was sold to US chip manufacturer AMD, Aleph Alpha from Germany fell far short of expectations, Magic and Liquid AI have moved to the USA.
But what European companies that do not have the capital to develop their own large AI models can use are open-source models. DeepSeek from China has impressively shown how open-source AI can completely turn the market on its head. After the DeepSeek shock, Microsoft, Amazon, and Perplexity did not hesitate for long and integrated the AI model, which was released under the MIT license, straight into their offerings.
DeepSeek illustrates the potential
To clarify: Anyone who uses DeepSeek via the Chinese company’s official app or its API will get the censored version of the AI model. Questions about politically sensitive topics such as Taiwan, the Tian’anmen massacre or the Uighur minority in Xinjiang are not answered or are glossed over in the style of political office propaganda.
However, anyone who downloads DeepSeek under the MIT license can use the AI model without censorship. Perplexity has already integrated DeepSeek R1 into its app alongside Claude 3.5 Sonnet from Anthropic, GPT-4o from OpenAI, Grok-2 from xAI, and Llama from Meta, and lo and behold: DeepSeek R1 knows very well that the Uighurs in China are “victims of systematic oppression and serious human rights violations”.
European companies must also be able to take advantage of this. It must be as easy as possible for them to use open-source AI, without major bureaucratic hurdles. DeepSeek will definitely not be the last open-source model that can compete with the proprietary AI models of the big players – it is already becoming clear that many more will follow. Even OpenAI CEO Sam Altman has already said that the company has been “on the wrong side of history” with regard to open source.
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AI Act offers only pseudo-exemptions for open source
The AI Act actually provides exceptions for open source. However, these are rather weak. There are indeed exceptions, but only as long as you are not using it for commercial purposes. The AI Act states:
“For the purposes of this Regulation, AI components that are provided against a price or otherwise monetized , including through the provision of technical support or other services, including through a software platform, related to the AI component, or the use of personal data for reasons other than exclusively for improving the security, compatibility or interoperability of the software, with the exception of transactions between microenterprises, should not benefit from the exceptions provided to free and open-source AI components .”
This means that every company (which is inherently commercial) will immediately fall under the strict AI Act rules and will be treated the same as all providers of proprietary AI models. And this is precisely what will hinder European companies that cannot develop AI themselves but at least have the opportunity to use open-source models.
This is important because open source offers the opportunity to avoid becoming dependent on OpenAI, Google, Anthropic and others, who offer AI models via API on their own terms. Put simply, DeepSeek and other open-source models allow you to install them on your own server or in your own cloud and achieve similar results to those of OpenAI and others.
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EU needs millions of competitive AI-powered SMEs
That is why the EU would be well advised to expand the exemptions for open-source AI and also allow commercial use. This could of course be accompanied by upper limits in order to regulate Big Tech more strictly due to their market power – similar to the Digital Markets Act (DMA) or the Digital Services Act (DSA) – even if they use open-source technologies.
The EU should see open-source AI as an opportunity to keep up with the global AI competition and to make it easier for small and medium-sized enterprises (SMEs) and startups in particular to access this technology. The struggling continent needs to make its small and medium-sized enterprises more competitive – they make up 99 percent of companies and employ 66 percent of all workers in the private sector.
The EU does not need five big tech companies like the USA, but millions of competitive small and medium-sized enterprises – and open-source AI is one building block for this.
