The EU AI Act Definition

What is the EU AI Act?

The EU AI Act is a groundbreaking regulation aimed at standardizing the development, marketing, and use of AI within the European Union. Its primary goals are to ensure that AI systems are safe, respect fundamental rights, and promote innovation and investment in AI across the EU. The EU AI Act classifies AI systems by risk level—unacceptable, high, limited, and minimal—and imposes corresponding compliance requirements. High-risk AI systems are subject to particularly stringent regulations.

The EU AI Act explained

Compliance with the EU AI Act requires businesses to conduct an inventory and risk assessment of their AI systems. Companies must classify these systems based on their risk levels, with high-risk systems, such as those used in critical infrastructure or employment, undergoing rigorous assessments and being registered in an EU database. Additionally, businesses must implement ethical AI practices, ensuring transparency, robust data governance, and cybersecurity measures.

Penalties for Non-Compliance

The penalties for non-compliance with the EU AI Act are substantial. Fines can range from €7.5 million to €35 million or 1% to 7% of global annual turnover, depending on the severity of the infringement.

Preparation Steps

To prepare for the EU AI Act, businesses should focus on risk management by assessing and mitigating risks associated with their AI systems. It’s crucial to educate employees about the Act and its implications through awareness and training programs. Establishing formal governance structures for AI compliance is also essential.

The EU AI Act is expected to take effect in Q2-Q3 2024, with a phased compliance period ranging from 6 to 24 months. Businesses must start preparing now to ensure they meet the compliance deadlines and avoid potential penalties.