The European Union’s Artificial Intelligence Act (EU AI Act) officially came into effect on August 1, 2024. This landmark regulation sets a comprehensive framework for the development, deployment, and use of AI systems within the EU, impacting a wide range of sectors and imposing new compliance requirements on businesses globally, including those based in the U.S.
The Act categorizes AI systems into risk levels – unacceptable, high, and low/minimal risk – each with corresponding regulatory obligations. High-risk AI systems (such as those used in critical infrastructure, education, or employment) will be subject to stringent requirements, including robust data governance, transparency, and human oversight measures.
AI providers must maintain detailed technical documentation, ensure compliance with copyright laws, and disclose information about the training data used. Models deemed to have systemic risk will face additional regulatory scrutiny and obligations.
AI systems must also be transparent, providing clear information about their operations and outputs. This includes requirements for labeling AI-generated content and ensuring users are informed when they interact with an AI system.
U.S. companies that operate in the EU or provide AI products and services to EU customers must comply with the Act’s provisions, even if they have no physical presence in the EU. This includes adhering to stringent rules for high-risk and general-purpose AI models.
The EU AI Act is expected to set a global standard for AI regulation, influencing similar legislative efforts in other jurisdictions, including the U.S. Companies will need to align their global AI strategies to meet these emerging standards.
The fines are crazy high – and the deadline is near – so don’t be surprised if certain AI models cease to be offered in the EU. From my POV, the EU has taken its “We don’t innovate, we regulate… then we sue” strategy too far this time. We’ll see.
Big tech is on it, but (clearly) it’s time to call your AI compute reps and ask them how this will impact your business.
Shelly Palmer is the Professor of Advanced Media in Residence at Syracuse University’s S.I. Newhouse School of Public Communications and CEO of The Palmer Group, a consulting practice that helps Fortune 500 companies with technology, media and marketing. Named LinkedIn’s “Top Voice in Technology,” he covers tech and business for Good Day New York, is a regular commentator on CNN and writes a popular daily business blog. He’s a bestselling author, and the creator of the popular, free online course, Generative AI for Execs. Follow @shellypalmer or visit shellypalmer.com. This article appeared last week on his site.