Impact of the EU AI Act on AI Development
With all the benefits the rapid AI development has brought to us, there are also some fears about the unregulated nature of AI that can be used for malicious intents. The initiation of the EU AI Act became a profound step in putting the production and use of AI applications under strict control, reducing public concern.
Based on our experience in AI development, Lemberg Solutions Company keeps abreast of all important news about the EU AI Act to ensure efficient and ethical AI solutions development. Read our key insights about the new EU AI Act, which can be important for your business!
What is the EU AI Act?
In April 2021, EU AI Act was outlined as the first regulation to oversee the development and distribution of AI systems within the European Union. The core aim behind this framework is to ensure all AI technologies function in non-discriminatory, secure and transparent ways.
Starting from August 1, 2024, Europe’s AI Act came into action, giving the organizations specific deadlines for transition. The responsible for compliance checks will be special authorities: notifying and surveillance one. Apart from that, the European Commission established an AI Office to monitor compliance with AI Act regulations.
How will EU AI Act impact AI development?
The magnitude of the AI EU Act impact on the development process relies on two major factors. First, it depends on your role within the company, whether you are a provider, deployer, or distributor. All these roles have different levels of responsibility and, therefore, requirements to comply with.
Another factor comes with the type of AI systems used in your company. The AI Act divides AI applications according to their risk levels and assigns certain regulatory obligations to follow. Below, you can find these core categories:
- Limited and minimal risks: These AI products pose little or no threat to human safety. In the case of systems with limited risk – they have only a few regulatory obligations, while minimal-risk applications are entirely unregulated.
- High risk: This category includes all AI systems that may have a negative impact on human rights and safety. Systems that are included in the high-risk category are related to critical infrastructure, educational training, border control, and law enforcement. All of them must follow strict rules and undergo constant oversight after they are placed on the market.
- Unacceptable risk: Under this category fall AI systems that put at risk the fundamental human, and therefore, they will be immediately banned. They include systems for biometric classification and social scoring, as well as those that can negatively affect the cognitive behaviors of at-risk populations.
The first thing companies need to do is conduct thorough assessments of AI applications they develop, distribute, or use. Those who fail to adapt to the new regulations must pay a fine. Violators must pay 7% of their business turnover or a maximum of 35 million euros.
What effects will the EU AI Act have on business operations?
The EU AI Act brings new requirements for risk and data management, procurement strategies, technical documentation, and the need for human supervision. While companies across all industries should brace themselves and start revising their operations, the AI Act will hit companies functioning in high-risk sectors and dealing with sensitive data first.
An important fact is that companies that work with high-risk AI applications must prepare their budget to meet all the standards. The main factors that affect the cost are the size of your business, the complexity of your AI system, and the support of specialists who will help you deal with all the intricacies of the EU AI Act.
The demand for businesses to adapt to new regulations may feel rushed and cause a lot of pressure. However, after a successful transition, the EU AI Act will bring immense benefits to organizations, like empowering companies to experiment with their AI products under supervision to test their product on feasibility. Also, by following the AI Act requirements, they will gain more trust from customers, showing dedication to the safety of user’s data.
Summary
As we enter the era of rapid digitalization, the EU AI Act is just the beginning of what the future holds for business. The EU AI Act is a crucial step for our society to create a safer and more reliable AI environment. Unfortunately, companies that cannot comply with new regulations are doomed to fail. Take these insights as your starting point and begin your preparations right now to ensure your adaptation process is as smooth as possible.
