What is the EU’s new AI Act and how will it affect the industry?

The EU on Friday approved regulations for the artificial intelligence sector designed to cut the risks from the growing and increasingly powerful technology.

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The Artificial Intelligence Act is the culmination of efforts made by the EU after it released the first draft of its rule book in 2021, allowing it to take the early lead in safety standards for the technology.

Officials, however, were jolted by the emergence of generative AI, the technology made popular by Microsoft-backed OpenAI.

“It was long and intense, but the effort was worth it. Thanks to the European Parliament’s resilience, the world’s first horizontal legislation on artificial intelligence will keep the European promise – ensuring that rights and freedoms are at the centre of the development of this ground-breaking technology,” said Brando Benifei, Italian MEP and co-rapporteur of the legislation.

“Correct implementation will be key – the Parliament will continue to keep a close eye, to ensure support for new business ideas with sandboxes and effective rules for the most powerful models.”

AI gained momentum with the introduction of generative AI, which rose to prominence thanks to ChatGPT.

Its sudden rise has also raised questions about how data is used in AI models and how the law applies to the output of those models, such as a paragraph of text, a computer-generated image, or videos.

“There’s a lot of work that has to be done in terms of reinforcement to play down things that you don’t want, like bias and [copyright] infringement,” Nigel Vaz, chief executive of global tech consultancy Publicis Sapient, recently told media.

According to the EU, the act was written to ensure that fundamental rights, democracy, the rule of law and environmental sustainability are protected from high-risk AI.

At the same time, it will try to ensure that it will boost innovation in Europe and help make the continent a leader in the sector.

“The rules establish obligations for AI based on its potential risks and level of impact,” it said.

EU legislators agreed to prohibit specific apps, “recognising the potential threat to citizens’ rights and democracy posed by certain applications of AI”.