Introduction

As the EU moves swiftly to regulate artificial intelligence, many startups are asking the same question: how will this affect access to EU funding? With the AI Act expected to fully apply by 2026 and the next EU budget (2028–2034) already in planning, innovators are navigating a complex but promising landscape.

This article explains what the EU’s AI regulation means for funding opportunities and how startups can align with compliance and strategic priorities to stay competitive.

What Is the EU AI Act?

The EU AI Act is the world’s first comprehensive legal framework for artificial intelligence. It categorizes AI systems by risk level (minimal, limited, high, and prohibited) and imposes obligations accordingly. High-risk systems—used in healthcare, finance, public services, and critical infrastructure—will face strict requirements around transparency, data governance, human oversight, and robustness.

Key takeaways:

• The Act will come into full effect by mid-2026.

• Startups developing high-risk AI need to prepare for compliance assessments.

• Non-compliance could disqualify projects from receiving EU funding.

How Will EU Funding Adapt to AI Regulation?

1. Compliance Will Become a Funding Prerequisite

EU programmes like Horizon Europe and the upcoming European Competitiveness Fund will increasingly require applicants to demonstrate AI Act alignment.

Expect to see calls that ask for:

• A description of your AI risk level and mitigation strategies

• Evidence of ethical AI design and testing

• Proof of data protection and cybersecurity safeguards

2. New Calls Will Support "Trustworthy AI"

As regulation tightens, the EU is also funding the solution. There are new and upcoming calls focused on:

• Explainable and transparent AI

• AI audit tools

• Compliance-as-a-service platforms

• AI sandboxing and regulatory pilots

3. Cross-Sector AI Projects Will Gain Priority

Funding will increasingly favour AI applications that address EU strategic goals:

• Green transition

• Digital sovereignty

• Health innovation

• Defence and cybersecurity

If your project combines AI with these impact areas, your proposal is likely to score higher.

Practical Tips for Startups

1. Map Your AI System's Risk Level

Use the AI Act classification to determine your system’s risk category and start documenting your approach to risk mitigation.

2. Build in Ethics and Governance Early

Include explainability, user consent, human oversight, and robust data handling in your design process. These elements can enhance both compliance and proposal strength.

3. Leverage Funding for Compliance Tools

Look out for EU calls funding compliance tech. You can apply not only as an AI developer but also as a service provider helping others meet regulatory demands.

4. Use AI Tools to Align with EU Funding Criteria

Platforms like Cogrant help translate your project into policy-aligned language, boosting your chances of funding success.

The Big Picture: Regulation as a Strategic Opportunity

Far from stifling innovation, the EU’s AI regulation is designed to foster trustworthy AI ecosystems. Funding programmes are being restructured to support startups that align with this vision.

Instead of treating compliance as a burden, startups should see it as a chance to differentiate and de-risk their offerings—traits that EU funders and investors increasingly value.

Final Thoughts

AI regulation in Europe is here to stay—and it’s changing the funding landscape for good. The most successful startups in the coming years will be those who embed compliance and ethics into their innovation roadmap from day one.

Need help aligning your proposal with EU priorities? Book a demo with Cogrant and discover how AI can simplify your grant journey.

FAQ

Q: Can non-compliant AI projects still get EU funding?
A: Unlikely. Especially for high-risk systems, non-compliance with the AI Act will make securing EU grants difficult or impossible.

Q: What tools can help startups ensure AI compliance?
A: Look for EU-supported projects building open-source compliance tools, or use platforms like Cogrant to integrate regulation-aligned language and documentation into your proposals.

Q: Will Horizon Europe still fund AI projects after 2027?
A: Likely yes, but under new branding or within broader innovation pillars like the European Competitiveness Fund.