The EU AI Act is the world’s first attempt to create a single set of rules for artificial intelligence. It’s designed to not just to protect people from harmful uses of AI but also to give businesses a clear framework and guidance on how to actually use AI. The law officially came into force on 1 August 2024, and just like the GDPR, it will impact companies all over the world, not just in the EU.
The Act tries to strike a balance: keep innovation moving, but make sure AI is safe, transparent, and fair.
A Risk-Based Approach
The EU AI Act uses a risk based approach.
Rather than treating every AI system the same, the EU is attempting to regulate AI systems based on risk. Basically, the stricter the potential impact on people, the tougher the rules.
AI systems are sorted into four categories of Risk:
Unacceptable Risk : Completely banned. These include AI that manipulates people without their awareness, exploits vulnerable groups (like children), or allows real time biometric surveillance in public (there are very limited exceptions for law enforcement).
High Risk : Heavily regulated. This includes AI in areas like recruitment, education, medical devices, border control, and the justice system. To be allowed on the EU market, these systems will need rigorous testing, detailed documentation, and ongoing monitoring. Think of it as the “medical grade” standard for AI.
Limited Risk : Allowed, but with transparency rules. Examples include chatbots (which must tell you they’re AI) and deepfakes (which must be labelled as such).
Minimal Risk : Most AI falls here, like spam filters or recommendation algorithms. No specific obligations, but the EU encourages following best practices.