Today’s digest looks at X’s agreement to drop Twitch from its lawsuit targeting advertisers over pulling their ad spend from the platform, the EU looking to ease AI compliance for startups, and Snapchat launching Sponsored AI Lenses.

X to Drop Twitch from Ad Spend Lawsuit  

X has reached a deal to settle its claims against Twitch, which alleged the Amazon-owned platform conspired with other companies and an advertising group to boycott X, resulting in loss of ad revenue. In a court filing on Monday, X informed a federal judge in Texas that it had signed a memorandum of understanding to dismiss the case against Twitch, provided Twitch meets certain undisclosed conditions by the end of the year.

The lawsuit, originally filed in November, accuses around a dozen companies of violating antitrust laws by pulling advertising from X.

EU Looks to Ease AI Compliance for Startups

The European Commission is seeking feedback on how to reduce the regulatory burden of the AI Act for startups, according to a document seen by Reuters. The decision comes in response to growing concerns from businesses across Europe over the cost and complexity of compliance.

The document, titled the AI Continent Action Plan, states that “there is an opportunity to minimise the potential compliance burden of the AI Act, particularly for smaller innovators.” The initiative is part of the EU's broader effort to balance innovation with responsible AI governance while ensuring that regulation does not stifle startups.

Snapchat to Launch Sponsored AI Lenses 

Snapchat is launching a new ad format called Sponsored AI Lenses, enabling brands to create interactive, AI-generated experiences using Snap’s proprietary generative AI technology.

These immersive lenses allow users to take selfies and see themselves transformed into various AI-generated scenes, offering a more engaging and playful alternative to traditional advertising formats. Each AI Lens uses a preset prompt and pose to deliver up to 10 unique transformations within a single lens, providing brands with a dynamic way to reach and captivate Snapchat’s audience.