What is the EU Law on Artificial Intelligence?

The AI Act is a comprehensive legal framework proposed by the European Commission to regulate AI applications. It categorizes AI systems based on the risk to fundamental rights and security, ranging from ‘high risk’ to ‘low risk’. The law aims to protect EU citizens from potential artificial intelligence gaps, while boosting innovation and competitiveness in the field of artificial intelligence.

Key aspects of the law include:

• Classification based on risk: AI systems are classified into four categories: Unacceptable risk, High risk, Limited risk and Minimal risk.
• Strict requirements for high-risk AI: High-risk AI systems, such as those used in critical infrastructure, law enforcement or employment, are subject to strict compliance requirements, including transparency, human oversight and strong data governance.
• Bans on certain AI practices: AI practices that are considered a clear threat to the rights and safety of individuals, such as social scoring by governments, are prohibited.
• Transparency obligations: AI systems that interact with humans, such as chatbots, must be designed so that users know they are interacting with an AI system.

• Businesses using or developing AI systems should invest in compliance infrastructure, particularly for high-risk applications. This includes implementing strong data management practices, ensuring transparency and maintaining human oversight.
• The AI Act could influence the direction of innovation by prioritizing the development of ethical, transparent and safe AI technologies. Compliance with the law could also be a market differentiator within and outside the EU.
• Failure to comply with the law can result in significant penalties, with fines of up to 6% of global annual turnover for the most serious violations. Businesses must be diligent in evaluating and classifying their AI systems to avoid legal implications.
• Companies may need to adjust their AI development and deployment strategies, focusing more on ethical issues and risk assessments from the design phase.
• As a pioneering legal framework, the AI Act is likely to influence global rules and standards for AI. Businesses operating internationally may need to consider the implications of the law beyond the EU.

The EU Law on Artificial Intelligence is a ground-breaking initiative in AI governance. It presents both challenges and opportunities for businesses. Following the law not only ensures compliance, but also encourages the development of AI systems that are ethical, transparent and beneficial to society. As the law shapes the landscape of AI use, businesses that proactively adapt to its standards will likely find themselves at a competitive advantage by leading responsible AI practices. The AI Act is not just a regulatory framework. It is a blueprint for the future of artificial intelligence in a society that prioritizes fundamental rights and security.