Germany adopts AI implementation law and exempts industrial AI

The German Bundestag passed the AI Implementation Act, establishing a national framework for enforcing the EU AI Regulation. The law retains the Federal Network Agency (Bundesnetzagentur) as the central market‑surveillance authority but the newly created coordination centre lacks direct supervisory powers, raising concerns over inconsistent enforcement and legal uncertainty for startups and midsize firms. An evaluation mechanism was added to review the effectiveness of the oversight structures and to consider stronger involvement of business, science and civil society.

Chancellor Friedrich Merz announced that industrial AI applications, particularly in the machine‑tool sector, will be exempted from the EU AI Act. The exemption is timed ahead of the EU's phased rollout of high‑risk AI rules, with the first obligations set to start in August 2026 and stricter requirements in December 2027. Together with the passage of the KI‑MIG (AI Market Surveillance and Innovation Promotion Act), the moves aim to boost Germany's manufacturing competitiveness while the government calls for broader EU deregulation.

Both measures place the Bundesnetzagentur at the core of German AI supervision and signal a focus on avoiding a fragmented regulatory landscape while supporting industrial innovation.