The Core Issue Nobody’s Talking About

When the EU AI Act Omnibus trilogue collapsed on 28 April 2026 after 12 hours of negotiation, most coverage focused on the failed August deadline postponement. But the real story is darker: negotiators couldn’t agree on a foundational question that affects thousands of European companies right now.

The unresolved dispute centres on Annex I—the architecture governing how AI systems embedded in regulated products (medical devices, industrial machinery, toys, connected cars) interact with existing sectoral safety law. Should these AI systems be exempted from the AI Act’s high-risk obligations because they’re already covered by the Machinery Regulation, Medical Device Regulation (MDR), and In Vitro Diagnostic Regulation (IVDR)? Or should they face dual compliance—both sectoral rules and AI Act requirements?

This isn’t theoretical. A medtech company with an AI-enabled diagnostic device, an automotive supplier building AI-powered safety systems, or an industrial machinery manufacturer adding predictive maintenance features all need clarity on whether they’re implementing one compliance framework or two.

Why the Collapse Matters More Than You Think

The May 2026 resumption under the Cypriot Presidency will attempt to resolve this, but the window is tight. If negotiators fail again, the original AI Act deadlines—including the 2 August 2026 high-risk compliance deadline—remain legally binding. But without clarity on Annex I, companies in regulated sectors face a compliance nightmare: they could build to sectoral rules only to discover they need AI Act compliance too, or vice versa.

Ireland’s upcoming EU presidency (30 June 2026) positions Dublin to influence these final negotiations if talks extend into the second half of the year. Given Ireland’s significant medtech, pharmaceuticals, and industrial automation sectors, clarity on regulated products matters acutely to Irish enterprise.

The Real Risk: Fragmentation

What happens if May talks fail again? The AI Act takes effect as written, with Annex I unclear. Member States could interpret it differently, creating a patchwork. A device approved in Germany might face additional scrutiny in France. A machinery manufacturer compliant in one jurisdiction might face enforcement action in another.

For Irish companies, this creates immediate pressure: regulators here will likely take a conservative interpretation, pushing dual compliance as the safe default—even if legal analysis might support a narrower view.

What Builders Should Do Now

  • Don’t wait for May clarity. If you’re building AI into regulated products, begin dual-framework compliance planning immediately.
  • Map your exposure. Identify which of your AI systems fall under Annex I candidate products and which sectoral rules apply.
  • Engage with your sector regulator. Irish Medical Devices Office and relevant EU notified bodies can provide interim guidance.
  • Document your compliance assumptions. When (not if) the rules change, you’ll need evidence of good-faith compliance effort.

Open Questions

Will the May trilogue find middle ground, or will another collapse force companies to navigate competing frameworks? Can Ireland’s presidency accelerate resolution, or will sectoral interests (pharma, automotive, machinery) continue to block consensus? And crucially: if the deadline passes without clarity, which regulator—AI Act enforcement bodies or sectoral regulators—takes the lead on enforcement?

These aren’t edge cases. They’re blocking issues for thousands of European enterprises.

Source: artificialintelligenceact.eu