>Because the AI act was mostly written to address issues with ML products and services. It was mostly done before ChatGPT happened, so all the foundation model stuff got shoehorned in.

It's not an excuse. Anybody with half a working brain should've been able to tell that this was going to happen. You can't regulate a field in its infancy and expect it to ever function.

>The compliance burden falls mostly on the companies big enough to handle it.

You mean it falls on anyone that tries to compete with a model. There's a random 10^25 FLOPS compute rule in there. The B300 does 2500-3750 TFLOPS at fp16. 200 of these can hit that compute number in 6 months, which means that in a few years time pretty much every model is going to hit that.

And if somebody figures out fp8 training then it would only take 10 of these GPUs to hit it in 6 months.

The copyright rule and having to disclose what was trained on also means that it will be impossible to have enough training data for an EU model. And this even applies to people that make the model free and open weights.

I don't see how it is possible for any European AI model to compete. Even if these restrictions were lifted it would still push away investors because of the increased risk of stupid regulation.