The European Commission on Wednesday proposed changes to the European Union's Artificial Intelligence (AI) Act as part of a wider digital package designed to cut red tape for businesses.

The "digital omnibus" would adjust the timeline and implementation of rules for high-risk AI systems, tying their application to the availability of technical standards and support tools, and extending simplified obligations for small and medium-sized enterprises.

Under the proposal, the deadline for applying the high-risk requirements would be capped at 16 months after the relevant technical standards are in place.

The first obligations under the EU AI Act took effect on Feb. 2, 2025, banning certain AI practices and uses and underscoring the need for AI literacy in organisations. Most other obligations, including the full compliance framework for high-risk AI systems, are due to apply from Aug. 2, 2026.

The Commission says the changes are intended to make the AI rulebook more innovation-friendly while maintaining safeguards for safety and fundamental rights.

The AI adjustments form part of a broader package that also seeks to streamline cybersecurity and data rules and to introduce "European Business Wallets," unified digital identities that would allow companies to sign, store and exchange verified documents and interact with public authorities across all 27 EU member states.

Overall, the Commission estimates the simplification measures in the digital omnibus could save firms up to 5 billion euros (5.78 billion U.S. dollars) in administrative costs by 2029.

To reduce overlapping obligations, the omnibus would create a single entry point for companies to report cybersecurity incidents currently covered by several laws, including the NIS2 Directive, the General Data Protection Regulation (GDPR) and the Digital Operational Resilience Act, according to the proposal.

Targeted amendments to the GDPR seek to harmonise and clarify certain provisions, including cookie rules, which the Commission says will both support innovation and improve the online user experience.

The proposals now go to the European Parliament and EU member states for negotiation and adoption. (1 euro =1.16 dollar