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As the founder of a unicorn company, I know a thing or two about startups. This is why I know that for many of them, the European Union’s AI Act is not just red tape. It is a death sentence.
Implementing AI Act compliance alone costs European start-ups up to €200,000 annually and takes over 12 months. The average seed round in Europe is just €1,3 million, with roughly 18 months of runway. This means startups would spend 15% of their capital and two-thirds of their time on compliance alone.
As technological advances accelerate, startups are our greatest asset. They are the innovation engine we rely on to create the next generation of technologies, industries, and jobs. Particularly in the field of AI, 99,9% of what is possible has not even been built yet. Europe should be unleashing this creative potential - not shackling it with bureaucracy.
The fundamental flaw of the AI Act is its assumption that regulation equals safety. But malicious AI systems will not be deterred by European paperwork. The internet has no borders - and neither do dangerous AI models. Just as laws do not prevent cyberattacks, regulation alone will not prevent harmful AI.
Real AI safety will not come from compliance but from innovation. From building systems that are robust, transparent, and aligned with human values. That is a tough technical challenge, but it is far more effective than drowning the sector in regulatory demands before we have even begun to compete.
And compete we must. Europe’s goal should be AI sovereignty - the ability to build and control world-class AI infrastructure and systems. That requires four critical ingredients: Chip production so we are not dependent on foreign supply chains, data centers to power large-scale models, sustainable and affordable energy to accommodate rising energy demands, and an excellent education system.
And all of this must happen in geographic clusters. Europe spreads its talent and resources too thin. One of Silicon Valley’s superpowers is density: the world’s best research institutions, startups, and infrastructure - NASA, Nvidia, OpenAI, Google, and Stanford - all within a few kilometers of each other. Europe needs its own deep-tech hubs where innovation can thrive across academia, business, and manufacturing.
When looking at how technological advances have unfolded throughout history, one thing becomes clear: those who adopt transformative technologies early on tend to win in the long run.The invention of the tractor did not just help farmers. It wiped out those farmers who refused to use it. AI will do the same and more. Because it will be the driving force behind every future innovation - whether in agriculture, automotive, or advertising. And overregulating it will not make Europe safer. It will make it irrelevant.
Daniel Khachab is the co-founder and CEO of Choco. Choco is on a mission to digitize global food supply chains, driving them toward sustainability, security, and profitability. Today, its AI platform facilitates half of all food traded in major cities like New York, London, and Berlin. Since its founding in 2018, Choco has raised $330 million, reaching unicorn status within 2.5 years. Previously, Daniel was the youngest Managing Director at Rocket Internet, where he oversaw growth across Latin America, Southeast Asia, Australia, and the Middle East.
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