On August 1st local time, the EU's Artificial Intelligence Act officially came into effect. This bill is the world's first comprehensive regulation on artificial intelligence, marking an important step for the European Union in regulating the application of artificial intelligence. Analysis indicates that many countries and regions are developing regulatory rules for artificial intelligence, and the new EU rules may provide important references for later entrants. However, the implementation of the bill may increase the compliance costs for AI related companies.

The EU takes an important step forward

The EU introduced that the purpose of formulating the Artificial Intelligence Act is to promote the popularization of trustworthy artificial intelligence while maintaining democracy, human rights, and the rule of law. EU Internal Market Commissioner Thierry Breton praised the bill as "an effective, moderate, and globally pioneering artificial intelligence framework".

The bill stipulates that artificial intelligence systems such as chatbots must clearly inform users that they are interacting with machines, and AI technology providers must ensure that synthesized audio, video, text, and image content can be detected as AI generated content. In addition, the bill prohibits the use of artificial intelligence systems that are considered to pose a clear threat to users' basic rights.

If a company enters the "prohibited" field, it will be fined 35 million euros or 7% of the global annual sales total, whichever is higher. If the obligations in the risk classification other than 'prohibited' are not fulfilled, a fine of 15 million euros or up to 3% of the global annual sales volume will be imposed based on the size of the business.

It is reported that the relevant rules of the EU Artificial Intelligence Act will be implemented in stages, with some rules coming into effect 6 or 12 months after the law is passed, while most rules will come into effect on August 2, 2026.

Italian EU member of parliament Brando Benifi stated that the Artificial Intelligence Act is "the world's first regulation that points the way towards safe, human centered development of artificial intelligence.

Previously, European industry organizations and some European governments opposed the introduction of comprehensive regulations for general artificial intelligence, arguing that lawmakers' focus should be on the dangerous uses of this technology rather than the models that support its use. European Parliament members say that the Artificial Intelligence Bill is one of the most lobbied bills the EU has dealt with in recent years.

European lawmakers say they are trying to make the legislation flexible so that it can adapt to rapidly developing technology. For example, one provision of the bill states that the European Commission may update its definition of technical elements for general artificial intelligence models based on market and technological developments.

The European Commission proposed a negotiation authorization draft for the Artificial Intelligence Bill in April 2021. Last December, the European Parliament, EU member states, and the European Commission reached an agreement on the Artificial Intelligence Bill.

The impact of the bill may exceed the scope of the European Union

Analysis indicates that the EU's Artificial Intelligence Act is the world's first comprehensive AI regulatory law, demonstrating the EU's foresight and leadership in the field of technology regulation. The bill specifically focuses on high-risk artificial intelligence applications, such as credit scoring and employee monitoring. The implementation of the bill will provide consistent rules for the regulation of artificial intelligence, and its impact will exceed the scope of the European Union.

It is reported that the core goal of the Artificial Intelligence Act is to establish a regulatory framework that responsibly utilizes the potential of artificial intelligence, ensures that technology benefits the public interest, and protects individual rights. All artificial intelligence systems deemed to pose a clear threat to people's safety, livelihoods, and rights will be prohibited

Falmer, a partner at PwC and an expert in artificial intelligence, said, "I believe that the EU's Artificial Intelligence Act has the potential to become a template for the world, and this is a critical moment for global regulation of the AI race." Taking the EU's General Data Protection Regulation as an example, he explained that the EU has already set the global direction for AI regulation.

Industry insiders believe that the implementation of the bill will have a significant impact on multinational corporations. As artificial intelligence applications move towards a more standardized track, compliance means increased costs, and the implementation of this bill will significantly increase the compliance costs for AI related enterprises.

According to early predictions, the bill could result in economic losses of over 30 billion euros for the EU over the next five years and increase compliance costs in the field of artificial intelligence by nearly 17%. Given strict regulatory requirements, participants in the artificial intelligence value chain need to invest more resources.

It is worth noting that during the phased implementation of the bill, there are also many vague or unclear issues that need to be clarified. Possible controversial issues mainly focus on the definition and specific compliance requirements, such as the precise boundaries of high-risk artificial intelligence systems and the distinction between basic and application models. There is also uncertainty in how to effectively evaluate and monitor the transparency and fairness of artificial intelligence systems.

US and Europe Accelerate Regulatory Cooperation on Artificial Intelligence

Last month, the European Commission, the UK Competition and Markets Authority, the US Federal Trade Commission, and the US Department of Justice signed a joint statement aimed at unleashing the opportunities that artificial intelligence technology can offer through fair and open competition, and establishing common principles to uphold fair competition and protect consumers.

The statement lists various competitive risks, including the risk of centralized control of key resources. In addition, the statement also lists consumer risks related to artificial intelligence, such as the possibility that AI may exacerbate deceptive and unfair practices that harm consumer rights.

The statement states that fair trade, interoperability of artificial intelligence, and the right of choice for businesses and consumers in competition are key principles that support competition, protect consumers, and help businesses innovate and develop. These principles often help promote competition and drive innovation.

At present, the development of artificial intelligence technology has broken through traditional geographical limitations and become a global issue. Bremer, the president of Eurasia Group, a well-known consulting firm in the United States, also pointed out that artificial intelligence technology is free flowing, and scientific research needs to be shared and open sourced. To seize the opportunities of digitization, networking, and intelligence, inclusive global cooperation is indispensable. We should adhere to the principles of promoting sharing through consultation and promoting good governance for intelligence, and promote the inclusive, universal, and sustainable development of artificial intelligence. (Source: Economic Reference News)