What to Know About the EU AI Act, Effective August 2024

The European Union’s AI Act (EU AI Act), effective starting August 1, 2024, represents a comprehensive regulatory framework aimed at managing artificial intelligence applications based on their associated risks. This landmark regulation introduces a tiered system.

One that classifies AI systems into the following risk categories (each tied to distinct compliance requirements): 

• Low/no-risk  

• Limited risk  

• High-risk  

Why was the EU AI Act created? To foster trust in AI tech.

“With the implementation of the EU AI act today, organizations developing or deploying AI systems in the EU will be required to take specific actions ranging from transparency to risk assessment and mitigation measures, based on the risk categorization of their tools,” explains Joshua Newsum, Director, Analyst Relations & Product Marketing, SAI360.  

“Why was the EU AI Act created? To foster trust in AI tech. Next up, companies need to invest in compliance programs to avoid the significant financial non-compliance costs,” he adds. 

Here’s What You Need to Know About the EU AI Act

Exemptions  

Low-risk AI applications are largely exempt from regulatory scrutiny. However, high-risk systems, such as those used in biometrics, medical devices, and critical public services, must undergo rigorous assessments, including a pre-market conformity evaluation and mandatory registration in an EU database. Developers of high-risk AI must adhere to stringent standards for risk management and transparency, aligning with the EU’s commitment to safeguard privacy and prevent misuse. 

Penalties 

The AI Act also introduces penalties for non-compliance, with fines reaching up to seven percent of global turnover for severe violations, underscoring the EU’s stringent approach to enforcing ethical AI practices. This framework is crucial for global companies. It sets a precedent for international AI governance, influencing regulatory landscapes beyond Europe. 

Governance Structure 

For businesses, the AI Act necessitates a robust governance structure that evaluates AI projects based on their risk profiles. It also ensures compliance through documented, auditable processes. It emphasizes continuous monitoring and adaptation to evolving regulations, compelling organizations to integrate ethical considerations into their AI strategies. 

How SAI360 Can Help Your Organization Make Sense of the EU AI Act 

SAI360 is well-positioned to assist companies in navigating the complexities of the AI Act. Our comprehensive Governance, Risk, and Compliance (GRC) solution enables organizations to assess and manage AI risks effectively, ensuring adherence to regulatory standards. By leveraging SAI360’s expertise, businesses can foster a culture of ethical AI use and maintain compliance with emerging global regulations. It’s a win-win. 

Let’s Start a Conversation 

Schedule a virtual coffee with a team member: Click here to demo our GRC solutions. 

References 

Wright, J. (2024, July 31). EU’s AI Act is now in force. Yahoo News. https://www.yahoo.com/news/eus-ai-act-now-force-113313248.html 

PwC Czech Republic. (n.d.). AI Act. PwC. https://www.pwc.com/cz/en/sluzby/technologie-a-data/ai-act.html