Europe’s AI Act 2024: What companies and investors should know
The Artificial Intelligence Act (AI Act), ratified by the European Council in May 2024, is a regulation designed to promote the safe and ethical development and utilisation of artificial intelligence, while simultaneously encouraging innovation and safeguarding fundamental rights. The Act categorises AI systems based on their risk levels: AI systems deemed to have an unacceptable risk will be banned in the EU from the end of 2024 onward. Estimates suggest that 5-50% of AI systems will be classified as high-risk, depending on the source. These high-risk AI systems must adhere to various compliance requirements and undergo external audits. Failure to comply with the regulation will incur substantial penalties, similar to those imposed under GDPR. Although certain aspects of the regulation's implementation remain undefined, it is crucial for companies and investors to quickly familiarise themselves with these regulations to mitigate unplanned costs and delays in their operational timelines.
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