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Small Business, Strategy, Technology

How the EU AI Act may affect you

Dennis Plucinik • March 20, 2024

The EU AI Act, approved by Parliament on March 13th, creates the first-ever legal framework to address a spectrum of risks by providing clear requirements and obligations for specific AI uses in order to ensure systems respect fundamental rights, safety, and ethical principles.

Here’s a quick overview of the main points of the AI Act:

  • There are four defined risk levels: Unacceptable, High, Limited, and Minimal, with systems in the Unacceptable category being banned entirely.
  • Unacceptable risk systems include those which use “subliminal, manipulative, or deceptive techniques to distort behavior and impair informed decision-making,”
  • High risk systems include critical infrastructures (e.g. transport), that could put the life and health of citizens at risk. These systems will be subject to strict obligations before being introduced to market.
  • Limited risk systems include transparency requirements for systems like chatbots, where humans may otherwise be unaware thy are interacting with machines.
  • Minimal risk systems such as image and video creation carry no regulation.

  • Once an AI system is deployed, the government, deployers, and providers will be jointly responsible for securing, monitoring, testing, and reporting serious incidents and malfunctioning.
  • Enforcement and implementation will be overseen by the new European AI Office.
  • The AI Act will enter into force 20 days after its publication in the Official Journal (May this year), and will be fully applicable 2 years later, with some exceptions: prohibitions will take effect after six months, the governance rules and the obligations for general-purpose AI models become applicable after 12 months and the rules for AI systems – embedded into regulated products – will apply after 36 months.

There are also a few other policy measures included as a part of the wider initiative:

  • AI Pact — Seeks the voluntary commitment of industry to anticipate the AI Act and to start implementing its requirements ahead of the legal deadline.
  • AI Innovation Package — A package of measures to support European startups and SMEs. Includes the Large AI Grand Challenge, which includes a prize giving AI startups financial support and supercomputing access.
  • Coordinated Plan on AI — Aims to accelerate investment in AI, implement AI strategies and programmes and align AI policy to prevent fragmentation within Europe. Proposes a minimum of €1 billion annual investment in AI from Horizon Europe.

Official listing of titles and articles: https://www.euaiact.com/

How does this effect companies in the US?

Similar to when GDPR was introduced, “The AI Act has extraterritorial reach, which means that U.S.-based providers, provider representatives, and deployers may be subject to the AI Act if they perform activities within the scope of EU law. AI systems used exclusively for military, defense or national security are excluded from the AI Act’s scope.” (source)

Additional resources on United States AI legislation:

Europe is NOW a global standard-setter in AI.

Thierry Breton
European Commissioner for Internal Market
"Europe is NOW a global standard-setter in AI." — Thierry Breton, European Commissioner for Internal Market.