Major Changes for American Tech Giants under the EU AI Law

Published On Thu Aug 01 2024
Major Changes for American Tech Giants under the EU AI Law

World's first major AI law enters into force — here's what it means for...

The European Union's landmark artificial intelligence law officially enters into force Thursday — and it means tough changes for American technology giants. Free 24/7 Connecticut news stream: Watch NBC CT wherever you are

Overview of the AI Act

The AI Act, a landmark rule that aims to govern the way companies develop, use and apply AI, was given final approval by EU member states, lawmakers, and the European Commission in May. This regulation sets out a comprehensive and harmonized regulatory framework for AI across the EU.

Impact on Technology Companies

The AI Act will primarily target large U.S. technology companies, which are currently the primary builders and developers of the most advanced AI systems. However, plenty other businesses will also come under the scope of the rules — even non-tech firms.

AI Act | Shaping Europe's digital future

Regulatory Measures

The legislation applies a risk-based approach to regulating AI, with different applications of the technology being regulated depending on the level of risk they pose to society. For high-risk AI applications, strict obligations will be introduced, including risk assessment, high-quality training datasets, routine logging of activity, and mandatory sharing of detailed documentation with authorities.

Prohibited AI Applications

The law imposes a blanket ban on applications of AI deemed "unacceptable" in terms of their risk level. Examples include "social scoring" systems, predictive policing, and the use of emotional recognition technology in the workplace or schools.

Impact on Global Tech Giants

U.S. giants like Microsoft, Google, Amazon, Apple, and Meta will be heavily impacted by the new rules due to their involvement in AI development. Cloud platforms such as Microsoft Azure, Amazon Web Services, and Google Cloud will also play a crucial role in supporting AI development.

Enforcement and Penalties

Companies that breach the EU AI Act could face fines ranging from 35 million euros ($41 million) to 7% of their global annual revenues. Oversight of AI models falls under the European AI Office, a regulatory body established by the Commission.

Future Implications

With the AI Act now in force, it will bring increased scrutiny on tech giants operating in the EU market and their use of EU citizen data. The law aims to encourage innovation while prioritizing the safe development and deployment of AI technology.

AI Act | Shaping Europe's digital future