EU Reaches Political Agreement on AI Omnibus

The EU’s AI Act was a groundbreaking regulatory framework when it was adopted in February 2024. Over the past two years, a lot has changed in the AI space and in EU politics. The European Commission moved to advance a “digital omnibus” in December 2025 to simplify and rework technology regulations, including the EU AI Act. Now those reforms have taken shape.  Earlier this month, the EU Commission, Parliament, and Council reached a political agreement on the omnibus. A recent Latham & Watkins memo discusses how these amendments impact the scope and enforcement of the EU AI Act:

• “Industrial AI carveout: AI used in industrial applications and products already regulated under the Machinery Regulation is exempt from the AI Act. Other regulated industrial products and safety components — including medical devices, toys, lifts, and certain transportation applications — need only comply with applicable sectoral safety rules, rather than potentially duplicative AI Act requirements.
• Narrower definition of “safety component”: The Agreement narrows the definition of “safety component” for HRAIS classification purposes. Relevant regulated products with AI functions that merely assist users or optimize performance will not automatically be subject to HRAIS obligations, provided that failure or malfunction does not create health or safety risks.
• SME simplifications extended to mid-caps: The AI Act’s simplified compliance framework for small- and medium-sized enterprises will be extended to companies with up to 750 employees and €150 million in annual revenue. Benefits include simplified guidance, reduced fines, regulatory sandbox access, and standardized documentation templates.
• Bias detection: The amendments make it easier to use GDPR special category personal data (e.g., health information, biometric data, race, or sexual orientation) where necessary to detect and mitigate bias in AI models.”

Overall, unlike the EU’s sustainability omnibus, the digital omnibus appears to keep legal requirements largely intact. Instead, the simplification measures introduce some new compliance obligations and clarify existing ambiguities. The agreement is expected to be formally adopted in July 2026.