Today's date marks a turning point for the European AI industry. The EU's Artificial Intelligence Act – known as the AI Act – will be fully enforced from February 25, 2026, and reports from Silicon Canals and other industry sources confirm that the majority of European startups themselves admit they are not compliance-ready.
For Norwegian companies, which are connected to the internal market through the EEA agreement, this is not a distant EU matter. It is an immediate business risk condition.
What does the AI Act require?
The AI Act divides AI systems into risk classes: unacceptable risk, high risk, limited risk, and minimal risk. It is particularly the high-risk category that imposes burdensome documentation, transparency, and quality assurance requirements on businesses.
Most are not ready
Ahead of its entry into force, industry surveys have shown a discouraging level of preparedness. According to Silicon Canals, a majority of startups in Europe have not completed the necessary compliance measures. This is confirmed by a broader picture: a survey reviewed by research sources associated with this article shows that as early as 2022, 50 percent of EU-based AI startups believed the law would slow down the pace of innovation. 16 percent considered halting AI development or moving their operations out of the EU.
The Center for Data Innovation has estimated that the AI Act could cost the European economy 31 billion euros over five years and reduce AI investments by almost 20 percent. These are figures that should concern Norwegian investors and entrepreneurs with ambitions for growth in the European market.
Norwegian startups in the firing line
Norway is not an EU member, but through the EEA agreement, Norwegian companies offering products and services in the EU/EEA market are directly subject to the AI Act. This means that a Norwegian health tech startup selling an AI-based diagnostic tool to German hospitals must meet the same strict requirements as a German competitor.
The challenge is that many Norwegian startups operate with limited resources and tight budgets. Compliance work of this magnitude requires legal expertise, technical documentation, and ongoing auditing – resources that would otherwise go towards product development and market expansion.
Investors change course
The consequences extend beyond individual companies. According to available research, most venture capitalists in Europe have already signaled that they will shift their investment portfolios towards AI systems in the low-risk categories. Out of 15 surveyed VCs, 9 state that they will concentrate on low-risk AI going forward.
Over thirty founders and venture investors signed an open letter in mid-2025 warning that the law risks creating 'a fragmented and unpredictable regulatory environment that undermines innovation, deters investment, and ultimately sidelines Europe.'
At the same time, figures from 2025 show that AI was actually the leading sector for European venture capital, with approximately 17.5 billion dollars in funding – up from just over 10 billion dollars in 2024. This suggests that capital is not fleeing AI as a field, but that it is increasingly channeled towards players who are either compliance-ready or operate in the low-risk segment.
Opportunities for those who are prepared
The picture is not unambiguously negative. Research indicates that compliance can actually become a competitive advantage in a market where customers – especially in the public sector and healthcare – demand responsible and verifiable AI.
Herman Kienhuis, managing partner at the VC fund Curiosity, argues that clear rules for safe AI use actually stimulate innovation by promoting more holistic product design and increasing market trust. Furthermore, the EU has included specific support measures for SMEs and startups in the regulations, although it remains to be seen to what extent these are sufficient.
For Norwegian companies that want to succeed in European markets going forward, the message from February 25, 2026, is clear: the AI Act is not something you can wait and see about. It is a condition for operating.