Reasoning
The EU AI Act, which emphasizes strict regulatory compliance and accountability for companies using AI technologies, has established a framework where fines could be substantial in cases of severe non-compliance. In recent years, tech giants have faced increasing scrutiny, and with the EU's zero-tolerance approach towards data privacy and ethical AI, the likelihood of fines exceeding €100M is plausible, particularly as enforcement actions are anticipated to ramp up in 2026. Notably, a report in early 2026 indicated that the European Commission is gearing up for aggressive enforcement, which aligns with the behaviors observed in other sectors, such as GDPR fines.Key uncertainty
The pace and nature of regulatory enforcement actions by the EU will heavily depend on the political climate and the prioritization of AI oversight in the EU’s broader regulatory agenda, which could shift based on external economic pressures or geopolitical considerations.