EU's AI Act Set to Reshape Tech Landscape from August 2024
Brussels, Saturday, 13 July 2024.
The European Union’s Artificial Intelligence Act, effective August 1, 2024, introduces a comprehensive regulatory framework for AI technologies. This groundbreaking legislation aims to ensure ethical AI development and use across the EU, with global implications for tech companies and users alike.
Key Provisions and Phased Implementation
The EU AI Act, formalized in the Official Journal of the European Union on July 12, 2024, aims to enhance the internal market by establishing a unified legal framework for AI systems. The Act categorizes AI applications into four risk levels and will be implemented gradually. High-risk systems, such as those used in medical devices and personnel management, will face strict compliance requirements starting August 2, 2027[1][2].
Impact on Businesses
The Act applies to all companies developing, offering, or using AI systems within the EU, including those outside the EU if their AI systems are marketed or used within the region. Businesses must prioritize compliance by establishing governance frameworks, identifying risk management principles, and implementing policies and procedures. Companies failing to comply could face sanctions of up to 7% of their total worldwide annual turnover[3][4].
Prohibited and High-Risk AI Systems
The AI Act prohibits certain AI systems, including social scoring and biometric categorization. High-risk AI systems, such as those used for recruitment and biometric identification, must adhere to stringent transparency and safety requirements. These provisions aim to ensure that AI systems are developed and used ethically and responsibly[2][5].
Global Implications and Compliance Efforts
The EU AI Act is expected to set a global benchmark due to the EU’s significant market influence. Over 20 countries have already implemented AI regulations or guidelines, and the Act may inspire similar legislation worldwide. Companies must begin developing compliance programs to meet the new requirements by the specified deadlines. PwC, for instance, is assisting businesses with AI governance and compliance frameworks to ensure they meet these new standards[3][6].