The European Union's major AI law goes into effect on Thursday, bringing significant implications for American technology companies.
About the AI Act
The AI Act is a piece of EU legislation that regulates AI. The law, first suggested by the European Commission in 2020, seeks to combat the harmful effects of artificial intelligence.
The legislation establishes a comprehensive and standardized regulatory framework for AI within the EU.
It will largely target huge U.S. tech businesses, which are currently the main architects and developers of the most advanced AI systems.
However, the laws will apply to a wide range of enterprises, including non-technology firms.
Tanguy Van Overstraeten, head of legal firm Linklaters' technology, media, and technology practice in Brussels, described the EU AI Act as "the first of its kind in the world." It is expected to influence many enterprises, particularly those building AI systems, as well as those implementing or simply employing them in certain scenarios, he said.
High-risk and low-risk AI systems
High-risk AI systems include self-driving cars, medical equipment, loan decisioning systems, educational scores, and remote biometric identification systems.
The regulation also prohibits all AI uses that are judged "unacceptable" in terms of danger. Unacceptable-risk artificial intelligence applications include "social scoring" systems that evaluate citizens based on data gathering and analysis, predictive policing, and the use of emotional detection technology in the workplace or schools.
Implication for US tech firms
Amid a global craze over artificial intelligence, US behemoths such as Microsoft, Google, Amazon, Apple, and Meta have been aggressively working with and investing billions of dollars in firms they believe can lead the field.
Given the massive computer infrastructure required to train and run AI models, cloud platforms such as Microsoft Azure, Amazon Web Services, and Google Cloud are critical to supporting AI development.
In this regard, Big Tech companies will likely be among the most aggressively targeted names under the new regulations.
Generative AI and EU
The EU AI Act defines generative AI as "general-purpose" artificial intelligence. This title refers to tools that are designed to do a wide range of jobs on a par with, if not better than, a person.
General-purpose AI models include but are not limited to OpenAI's GPT, Google's Gemini, and Anthropic's Claude.
The AI Act imposes stringent standards on these systems, including compliance with EU copyright law, disclosure of how models are trained, routine testing, and proper cybersecurity measures.