Even though politicians in the EU ultimately found a compromise that the German digital economy supports in order to create a working framework for artificial intelligence (AI) in Europe, there is still some unease with regard to the AI Act. There is great concern among companies that the baby will be thrown out with the bathwater after all, with the risk-based approach to AI regulation ultimately leading to even simple and tried-and-tested control systems for household appliances suddenly being considered a high-risk application. This concern is not unjustified, as a similarly far-reaching piece of regulation previously devised in the EU, the General Data Protection Regulation (GDPR), is still dividing opinion. Some recognise it as a successful global blueprint, while others see it as a brake on innovation.

The risk of the AI Act becoming the latter cannot be denied, to say the least. This could result in a further decline in Germany's "digital sovereignty", as the industry association Bitkom has put it. This is because the ability to "produce key technologies itself" or at least to have the authority to decide from which third countries digital products and services are sourced is reflected in the degree of dependence on supplies from abroad and, in particular, in cluster risks that exist with regard to relations with China and the USA. And these are constantly growing.

The causes of these dependencies are only partially obvious. For example, large parts of the value chain in the area of digital hardware, such as PCs, laptops, smartphones and memory chips, have been migrating to Asia for many years, mainly to China, because Germany and Europe as a whole lack the framework conditions required to scale such production competitively on a global scale. In this respect, the idea of turning back the clock at this point and engaging in so-called nearshoring, for example, is economically absurd. However, this does not only apply to Germany and Europe. The idea that Apple could relocate a significant amount of iPhone production from China also belongs in the realm of dreams – and would probably be more of a nightmare even for the financially strong US company. The global division of labour is now so firmly established at this point that a reorganisation on an almost unimaginable scale would be economically painful. The USA must be and has been able to deal with this dependency because its leading role in key digital technologies is undisputed. In Europe and Germany, however, there is a lack of a counterweight that could be thrown into the balance.

The fact that an often prohibition-orientated, rigid legal framework plays at least a central role is shown by the way the data and platform economy is handled. The global duopoly in smart devices on the private customer side arose from the innovative power of Apple and Google, accompanied by a very liberal legal framework when it comes to data usage. The same applies to social networks such as Facebook or web hosts such as AWS and Microsoft. German companies can no longer compete in a meaningful way, but there is still an opportunity for commercial-industrial platform solutions based on big data. However, there is little sign of speed here either. For years, industry experts have been urging companies to utilise the vast potential of big data technologies – now also supported by AI - in order to possibly set technological standards, be it in applications for the energy transition, transport systems, medicine and pharmaceuticals and much more.

German companies can no longer reduce their digital dependency in many areas. However, the aim can be to balance them out by opening up business areas for innovative technologies. This requires entrepreneurial investment, but also a regulatory framework that is not overly restrictive. The AI Act is the following acid test for this.