The AI Act for SMEs and start-ups.
Reviewed
Short answer
The AI Act has no general exemption for small companies, but it gives SMEs and start-ups lower fine caps, a simplified technical documentation form, simplified quality-management rules, priority access to regulatory sandboxes and reduced conformity-assessment fees; since the 2026 Digital Omnibus, small mid-cap companies (SMCs) get several of the same reliefs. SMEs are defined by Commission Recommendation 2003/361/EC and SMCs by Recommendation (EU) 2025/1099.
Official sources: AI Act, Article 62 · Regulation (EU) 2026/1744
The reliefs, side by side
| Relief | SMEs and start-ups | Small mid-caps | Article |
|---|---|---|---|
| Fine ceiling is the lower of the amount and the percentage | All fines | Fines under Article 99(4) and (5), not prohibited practices | 99(6), (6a) |
| Member states weigh their interests and economic viability when imposing penalties | Yes | Yes | 99(1) |
| Simplified technical documentation form (Annex IV) that notified bodies must accept | Yes | Yes | 11(1) |
| Quality management system proportionate to size | Yes | Yes | 17(2) |
| Certain quality management elements in a simplified manner | If they have no partner or linked enterprises | — | 63(1) |
| Priority access to AI regulatory sandboxes | With a registered office or branch in the EU | — | 62(1)(a) |
| Tailored awareness and training, dedicated channels for questions, help joining standardisation | Yes | — | 62(1)(b)–(d) |
| Conformity assessment fees reduced in proportion to size | SME providers | — | 62(2) |
| Support in meeting the AI literacy duty | In particular SMEs | — | 4(2) |
| Guidance and codes of conduct that pay attention to their needs | Yes | Yes | 70(8), 95(4), 96 |
What does not change with size
- The prohibitions of Article 5 apply to everyone, and the SMC fine reduction does not cover them.
- Article 50: a small company that publishes deepfakes must disclose them like any other deployer.
- High-risk requirements: the simplifications change the paperwork, not the level of protection; Article 63(1) says so explicitly.
- AI literacy (Article 4) applies to providers and deployers of every size.
Typical situations
| You | What applies | From |
|---|---|---|
| Use general AI assistants for e-mails, research or code | AI literacy for the staff who use them | 2 February 2025 |
| Publish AI images, video or voice in marketing | Disclose deepfakes (Article 50(4)) | 2 August 2026 |
| Offer a chatbot or an AI generator under your brand | Tell users they talk to an AI; mark generated output (Article 50(1), (2)) | 2 August 2026; 2 December 2026 for marking by systems already on the market |
| Use an AI tool to screen job applicants | Deployer duties for high-risk AI (Article 26) | 2 December 2027 |
| Build such a screening tool | Provider duties for high-risk AI, with the simplified documentation form | 2 December 2027 |
Questions
- Are start-ups exempt from the AI Act?
- No. The AI Act defines SMEs, including start-ups, by Recommendation 2003/361/EC and gives them lighter treatment in fines, documentation, quality management, sandboxes and fees, but the obligations themselves still apply.
- What is a small mid-cap under the AI Act?
- A small mid-cap enterprise as defined in point (2) of the Annex to Commission Recommendation (EU) 2025/1099 (Article 3(14b), added by the Digital Omnibus). Such companies get lower fine caps for most infringements and may use the simplified documentation form.
Sources
- AI Act, Article 62: Measures for providers and deployers, in particular SMEsEuropean Commission, AI Act Service Desk (AI Act Explorer)Consolidated text as at 27 July 2026 (includes the Digital Omnibus, Regulation (EU) 2026/1744), shown in the Commission’s AI Act Explorer.read
- AI Act, Article 63: Derogations for specific operatorsEuropean Commission, AI Act Service Desk (AI Act Explorer)Consolidated text as at 27 July 2026 (includes the Digital Omnibus, Regulation (EU) 2026/1744), shown in the Commission’s AI Act Explorer.read
- AI Act, Article 99: PenaltiesEuropean Commission, AI Act Service Desk (AI Act Explorer)Consolidated text as at 27 July 2026 (includes the Digital Omnibus, Regulation (EU) 2026/1744), shown in the Commission’s AI Act Explorer.read
- AI Act, Article 3: DefinitionsEuropean Commission, AI Act Service Desk (AI Act Explorer)Consolidated text as at 27 July 2026 (includes the Digital Omnibus, Regulation (EU) 2026/1744), shown in the Commission’s AI Act Explorer.read
- AI Act, Article 4: AI literacyEuropean Commission, AI Act Service Desk (AI Act Explorer)Consolidated text as at 27 July 2026 (includes the Digital Omnibus, Regulation (EU) 2026/1744), shown in the Commission’s AI Act Explorer.read
- Regulation (EU) 2026/1744 (Digital Omnibus on AI) — Article 111(4) transition, Article 50(7)EUR-Lex / Official Journal of the EURead on 2 November 2026 from the EU Publications Office’s copy of the Official Journal text (publications.europa.eu, same act); EUR-Lex blocks scripted fetches.read
Last reviewed by Volkan Çatak, Founder, Proofcan.
Not legal advice. This page explains official texts in plain words and links each one; check the sources, or a lawyer, before relying on it for a decision.