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At a time when Artificial Intelligence (AI) permeates every aspect of our lives, the European Union is innovating, as the first global legislator to attempt to regulate AI. The European AI Regulation (AI Act), with direct effect for Member States, was adopted on 13 March by the European Parliament. This new legislation will come into force towards the end of May, giving businesses 6-24 months to adapt. Fines for non-compliance can reach up to €35 million or 7% of global gross trading turnover.
The AI Act takes a risk-based approach to regulating AI systems based on the risks they pose to society and people. This framework aims to ensure that AI systems are developed and used in a way that respects human rights, security concerns, and EU values.
1. Prohibited AI schemes: certain AI applications that are considered to present "excessive risks", such as manipulation techniques or those that exploit vulnerable groups, are completely banned. These schemes must be phased out by the end of 2024.
2. High-risk AI schemes: AI systems that could significantly affect the safety, health or fundamental rights of people must comply with strict requirements before they enter the EU market. This category includes systems in important areas such as health, critical infrastructure, education and labour.
3. Low-risk AI systems: This includes AI applications such as chatbots, which will be required to maintain a level of transparency to inform users that they are interacting with AI.
4. Low risk AI systems: The majority of AI applications, which pose minimal risk, will enjoy the freedom to develop without additional regulatory obligations.
5. General purpose AI systems: The legislation separately addresses general purpose AI systems (general purpose AI systems), which are characterised by their broad capabilities and potential systemic risk, such as the various Generative AI chatbots available on the market.
As the EU prepares for the implementation of the AI Act, businesses should immediately assess their own use and deployment of AI technologies in relation to the new regulatory framework. The next steps for businesses are:
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