Charting the Path of AI Compliance: Insights into the EU’s AI Regulation December 14, 2023December 14, 2023In April 2021, the European Union made a decisive move towards establishing a comprehensive legal framework for artificial intelligence (AI) with the introduction of the Artificial Intelligence Act (AIA). This groundbreaking proposal aims to ensure that AI systems in the EU market are safe, respect fundamental rights and values, and offer legal certainty to facilitate investment and innovation in AI. The overarching objective is to foster a single market for lawful, safe, and trustworthy AI applications, averting market fragmentation.Defining AI: The Foundation of the AI ActA critical aspect of this regulation is the precise definition of AI systems.The EU has narrowed this definition to include systems developed through machine learning, logic- and knowledge-based approaches, and more recent general-purpose AI systems, like OpenAI’s GPT models, which have been the subject of intense debate due to their potential widespread impact.This clarification is essential for delineating the scope of regulation and ensuring that it applies to the appropriate technologies.Responsibilities and Compliance: The Core of the RegulationThe AIA introduces rigorous requirements for high-risk AI systems and outlines the responsibilities of various stakeholders in the AI value chain. The updated proposal, reached after extensive debates and concessions, makes these requirements more technically feasible and less burdensome for stakeholders, such as small and medium-sized enterprises (SMEs). This approach reflects a recognition of the complex and interconnected nature of AI development and distribution, necessitating clear allocation of responsibilities and roles among providers, users, and other actors.What are General-purpose AI systemsAdditionally, the EU has addressed general-purpose AI systems, recognizing that they can be used for multiple purposes and may become high-risk when integrated into other systems. The AIA specifies that certain high-risk AI system requirements will apply to general-purpose AI systems, with Member States maintaining the final say on their application through implementing acts. This nuanced approach allows for flexibility and adaptability to specific characteristics of these systems and evolving market and technological developments.Scope and Exclusions: Defining the BoundariesThe AIA also clarifies its scope and exclusions. Notably, it excludes AI systems used for national security, defense, military purposes, and non-professional uses, except for transparency obligations. This exclusion was a point of contention, particularly regarding high-tech surveillance tools, but was eventually agreed upon to focus the regulation on areas where EU oversight is most pertinent and effective.Transparency and Accountability in AI SystemsTransparency is another key focus of the AIA, particularly regarding the use of high-risk AI systems. Public authorities, agencies, and bodies using high-risk AI systems will be obliged to register in the EU database. This measure is part of a broader effort to enhance accountability and oversight of these systems, particularly when they involve sensitive technologies like emotion recognition systems.Fostering Innovation within Regulatory FrameworksTo support innovation while maintaining regulatory oversight, the AIA introduces provisions for AI regulatory sandboxes. These sandboxes, refined through intense negotiations, create controlled environments for developing, testing, and validating innovative AI systems under the supervision of national authorities. They permit real-world testing of AI systems under specific conditions, fostering innovation while ensuring compliance with regulatory standards.Global Reach of the AI ActFurthermore, the AIA extends its reach to AI systems operated by EU-based entities that contract services to operators outside the EU, especially when these systems qualify as high-risk. This provision, which aims to prevent circumvention of the regulation, ensures the protection of individuals within the EU, even when the AI system is operated from outside its borders.Stop employees from sharing company secrets in SAAS applications.The EU’s Artificial Intelligence Act is a pioneering step towards regulating the rapidly evolving field of AI. By defining AI systems, setting clear requirements for high-risk applications, emphasizing transparency, and fostering innovation within a controlled framework, the EU is positioning itself at the forefront of AI governance. Solutions like SecureSlice play a vital role in this new era, providing the necessary tools to ensure compliance and protect sensitive information in AI applications. The AIA not only charts a course for the responsible development and use of AI in the EU but also sets a benchmark for global AI regulation.Table of ContentsDefining AI: The Foundation of the AI ActResponsibilities and Compliance: The Core of the RegulationWhat are General-purpose AI systemsScope and Exclusions: Defining the BoundariesTransparency and Accountability in AI SystemsFostering Innovation within Regulatory FrameworksGlobal Reach of the AI ActStop employees from sharing company secrets in SAAS applications. Blog Post AIAI RegulationEU AIInsider Risk