EU AI Omnibus raises SME relief threshold to 750 employees and €150M revenue — mid-cap companies now get simplified compliance
The EU AI Act omnibus political agreement reached on May 7 raises the small- and medium-sized enterprise threshold for simplified compliance to 750 employees and €150 million in annual revenue. Companies under that cap get simplified guidance, reduced fines, regulatory sandbox access, and standardized documentation templates — meaningfully widening the cohort that gets EU-friendly regulatory treatment.
The threshold change is the news. Original AI Act drafting defined SME at the European-Commission-standard 250 employees and €50M revenue — a cohort large enough to capture most genuine startups but small enough to exclude well-funded scale-ups. The omnibus raises the bar significantly: 750 employees and €150M revenue brings many Series C / Series D venture-funded AI companies into the SME-relief framework. For a company at $80M ARR and 600 headcount, the omnibus is the difference between being a regulated-incumbent under the AI Act and being a regulatory-sandbox participant with simplified obligations.
The political-economy interpretation: the EU Commission negotiated the omnibus in response to industry pressure that the original thresholds were too restrictive for the European AI ecosystem to compete with US-headquartered incumbents. Raising the SME cap to 750 employees / €150M lets Mistral (now well above the 250/€50M floor), the German-Swiss research labs, and the French government-backed Bull/Atos-derived AI labs all retain SME-class treatment. It's a regulatory adjustment specifically designed to keep the EU-domiciled AI cohort competitive with US-headquartered alternatives that face the equivalent threshold-shifted Federal framework. Whether it works depends on whether the broader AI Act enforcement (Q1 2026 €250M in fines) creates more compliance burden than the SME relief offsets.
Consilium — AI Council and Parliament agree to simplify and streamline rules → · Latham Watkins — AI Act Update EU Resolves to Change Rules and Extend Deadlines → · Tech Policy Press — What the EU AI Omnibus Deal Changes for the AI Act →