Andreas Cleve has lots on his mind as chief executive of Danish healthcare start-up Corti — wooing new investors, convincing clinicians to use his company’s “AI co-pilot” and keeping up with the latest breakthroughs in generative artificial intelligence.

But he fears that efforts like these will be made harder by a new concern: the EU’s new Artificial Intelligence Act, a first-of-its-kind law aimed at ensuring ethical use of the technology. Many tech start-ups are concerned that the well-intentioned legislation might end up smothering the emerging industry in red tape.

The costs of compliance — which European officials admit could run into six-figure sums for a company with 50 employees — amount to an extra “tax” on the bloc’s small enterprises, Cleve says.