BRUSSELS — Germany is on track to have the EU’s artificial intelligence rules rewritten to ease the pressure on its struggling industrial heavyweights such as Siemens and Bosch.

EU ambassadors agreed to support Germany’s push to exempt machinery from the EU’s artificial intelligence law as part of talks that could conclude Wednesday night, five EU diplomats told POLITICO.

It’s a big win for Berlin, which has launched a last-ditch effort over the past few weeks to secure less stringent AI rules for its industries. Chancellor Friedrich Merz personally promised German CEOs to fight for a more supportive AI regime at the EU level.

If confirmed, the change marks a dramatic departure from the law’s initial form, which was designed to cover all sectors and uses of artificial intelligence.

But Germany has faced resistance from a group of ten countries that warned that settling AI under sectoral law amounted to “deregulation, not simplification.”

The decision comes as part of a broad review of the AI law that will also delay restrictions on high-risk uses of AI in the EU by more than a year and give companies a grace period to meet new requirements to watermark AI-generated content.

A deal on Wednesday would be the first significant rollback of rules in the digital space, as the EU faces pressure from the U.S. over its tech legislation and amid warnings from its own industry and governments that strict restrictions will put the bloc at a disadvantage in a global AI race.

Out of time

EU countries swung behind Germany’s demands on Wednesday morning when EU ambassadors backed a pitch by the Cypriot presidency of the Council of the EU, which leads negotiations on behalf of countries, to change the law’s annex to exempt machinery.

More than a dozen ambassadors backed the change, according to five EU diplomats, giving the Cypriots the mandate to push for the exemption at final negotiations with the European Parliament and the European Commission on Wednesday night.

Under the proposal, industrial AI applications would have to meet the AI requirements set out in the machinery rules instead of the AI Act.

POLITICO reported earlier Wednesday that Germany had secured France’s backing ahead of the meeting of ambassadors, according to a top French official speaking at POLITICO’s AI & Tech Week in Brussels.

“We share in principle the views of Germany on machines,” Thomas Courbe, director general for enterprises at the French Ministry of the Economy and Finance, said right before the ambassadors’ meeting kicked off.

The push is unlikely to face resistance at the negotiations on Wednesday evening.

The European Parliament had previously asked that a series of products covered by sectoral legislation be subject only to those laws, not to the bloc’s AI Act as well.

But work on the reforms faces a deadline: with the rules on high-risk uses set to kick in this August, legislators set an end-of-April deadline to ensure companies face no legal uncertainty.

Reluctant countries obtained “additional safeguards” in the deal among ambassadors on Wednesday morning, according to two diplomats — designed to ensure that industrial AI applications will still have to meet requirements such as keeping a human in the loop.

Some of Europe’s largest tech firms had actively weighed ahead of the deal.

Top executives of companies, including Dutch chip-tool supplier ASML and German engineering company Siemens, issued a new plea on Monday, asking to “enable industrial AI applications without overlapping constraints.”

Despite the agreement among countries, Germany has been criticized for raising its concerns only at a late stage in the talks, rather than when countries first agreed on their positions.

“If you, as a member state, have any concerns, please tell us earlier,” Dariusz Standerski, Polish secretary of state for digital affairs, told POLITICO’s AI & Tech Week event on Tuesday.