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What does the EU’s AI Act mean for artificial intelligence innovation? 

Sinead Conboy

The EU's landmark AI Act gained momentum last week as negotiators from the EU parliament, EU commission and national governments agreed rules about systems using artificial intelligence. The proposal will be passed in the new year by the European Parliament, but what does it mean for the AI technological revolution? 

The draft regulation aims to ensure that AI systems placed on the European market and used in the EU are safe and respect fundamental rights and EU values. This landmark proposal also aims to stimulate investment and innovation on AI in Europe. 

“This is a historical achievement, and a huge milestone towards the future! Today’s agreement effectively addresses a global challenge in a fast-evolving technological environment on a key area for the future of our societies and economies. And in this endeavour, we managed to keep an extremely delicate balance: boosting innovation and uptake of artificial intelligence across Europe whilst fully respecting the fundamental rights of our citizens.” – Carme Artigas, Spanish secretary of state for digitalisation and artificial intelligence. 

Key Points of the provisional agreement: 

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The aim of the act is to ensure the responsible development and deployment of AI technologies, and it addresses key concerns such as risk, transparency, and ethical use of AI.  

Risk

AI technology will fall into one of four risk categories – Prohibited, High-Risk, Limited Risk and Minimal Risk – based on the intended use of the system. Examples of High-Risk AI include systems used in sectors such as healthcare, transportation, and the legal system where AI’s impact could have greater consequences.  

Transparency

Any high-risk AI system will have to pass a fundamental rights impact assessment before it is put in the market. It will also oblige certain users of such systems to register in the EU database for high-risk AI systems. There are also provisions for lower risk systems which such as disclosing that content is AI generated to allow users to make more informed decisions.

Ethical use

In order to protect individual privacy, the act proposes strict limitations on the use of biometric identification and surveillance technologies by law enforcement and public authorities, particularly in public places. Such systems will be subject to appropriate safeguards to respect the confidentiality of sensitive operational data.

Banned applications of AI:

In addition to determining the risk of a system using AI, the act also sets out cases where the risk is deemed unacceptable and therefore such systems will be banned entirely in the EU. Examples of such applications include cognitive behavioural manipulation, the untargeted scraping od facial images from the internet or CCTV footage, emotion recognition in the work place and educational setting, social scoring, biometric categorisation and some cases of predictive policing.

Supporting Innovation: 

The initial proposal by the European Commission was substantially modified in order to create a legal framework designed to support the innovation of AI systems in a safe and sustainable manner. 

It has been specified that AI regulatory sandboxes, designed to create a controlled setting for the development, testing, and validation of cutting-edge AI systems, should permit the testing of these systems in actual real-world scenarios under specific conditions and safeguards. To ease the administrative load for smaller companies, the provisional agreement outlines a set of measures to support such operators and incorporates limited and clearly defined exceptions. 

Penalties:  

The Act also sets out potential penalties for any company in violation of the legislation which is set as a percentage of the company’s global turnover or a fixed amount, whichever is higher. There will more proportionate caps on administrative fines for SMEs and start-ups. The penalties are as follows: 

  • €35 million or 7% for violations of the banned AI applications 
  • €15 million or 3% for violations of the act’s obligations 
  • 7.5 million or 1.5% for the supply of incorrect information. 

Final Thoughts:  

AI has revolutionized many aspects of human life, both in personal and professional aspects, and has been a trending topic globally. The AI Act will be finalised in the coming weeks and will come into effect in 2025, with some exceptions for specific provisions. It comes at a time when AI’s development has been described as over-hyped in the short term and underestimated in the long run. The EU is the first governing body to address the concerns, challenges, and opportunities of AI with legislation and it could set a precedent for other nations to follow suit. 

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*The images in this post were created using AI.
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