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Can the EU Lead the Way in Regulating AI? Introducing the AI Act

As the world grapples with the complex challenges and opportunities presented by artificial intelligence (AI), the European Union (EU) has emerged as a frontrunner in enacting laws to regulate this rapidly advancing technology. With the recent introduction of the AI Act, the EU seeks to address pressing concerns surrounding deepfakes, facial recognition, and the overall impact of AI on society. This groundbreaking legislation sets a precedent for other nations and prompts important discussions on the regulation of AI worldwide.

Classifying AI Systems by Risk: Striking the Right Balance

The AI Act employs a risk-based approach, classifying AI systems into four categories based on the level of risk they pose to users:

  1. Unacceptable Risk: Systems in this category will be outright banned due to their potential harm. Examples include manipulative voice-activated toys that encourage dangerous behavior in children, social scoring by governments based on personal characteristics, and predictive policing systems that rely on profiling and past behavior.
  2. High Risk: AI systems falling under this category will undergo rigorous assessments before being allowed on the market. Ongoing monitoring will also be required during their use. High-risk applications span various domains such as education, critical infrastructure, law enforcement, and management of asylum and migration. Compliance with the EU’s product safety legislation for items like toys, cars, and medical devices also falls within this category.
  3. Limited Risk: AI systems with limited risk must adhere to minimal transparency requirements. Users should be made aware when they are interacting with AI, especially in cases involving image, audio, or video generation (e.g., deepfakes). The EU urges companies like Google and Facebook to promptly flag AI-generated content. Additionally, AI developers will need to publish summaries of the copyrighted data used to train their systems, aiming for increased transparency.
  4. Minimal or No Risk: AI systems that pose minimal or no risk, such as those used in video games or spam filters, are exempt from additional obligations under the AI Act. These systems comprise the majority of AI applications used within the EU.
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Impact and Compliance: Potential Challenges and Consequences

While the AI Act represents a significant step toward regulating AI, it also raises pertinent questions and potential challenges, including in respect of:

  1. Foundation Models: The legislation addresses the need for transparency in the training of AI systems, particularly foundation models that underpin generative AI tools like ChatGPT. Developers will be required to register the sources of data used for training and prove compliance with copyright laws.
  2. Human Oversight and Fundamental Rights: The AI Act emphasizes the importance of human oversight and the establishment of redress procedures for AI systems. A thorough “fundamental rights impact assessment” must be conducted before deploying these tools.
  3. Real-Time Facial Recognition: One contentious issue is real-time facial recognition, which the EU parliament has proposed banning. However, law enforcement agencies see this technology as a vital crime-fighting tool. The issue of real-time facial recognition will likely spark intense debate and scrutiny during the legislative process.

The Brussels Effect and the Path Forward

The EU aims to finalize the AI Act by the end of the year, following discussions between the European Commission, the EU Parliament’s AI committee chairs, and the Council of the European Union. Real-time facial recognition remains a point of contention, as the technology has both potential benefits and significant privacy concerns. The EU aspires for its regulation to become the global “gold standard,” encouraging major players like Google and Facebook to adopt these laws as their operational framework—a phenomenon known as the “Brussels effect.”

As the EU takes the lead in regulating AI, other countries will likely closely monitor the outcomes and lessons learned from this pioneering legislation.

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