AI Law | The EU Artificial Intelligence (AI) Act - What It Means for Your Business Today

Executive Summary

Artificial Intelligence (AI) has rapidly moved from an emerging innovation to a core operational component across nearly every industry. With the adoption of the EU Artificial Intelligence Act (“EU AI Act”) the European Union has created the first comprehensive, risk-based regulatory framework designed to ensure that AI systems placed on the EU market or whose output is used in the EU is safe, transparent, and respects fundamental rights.

The Act entered into force on August 1, 2024, and although full implementation spans 36 months, several provisions are already binding today. The EU AI Act shifts compliance from an optional best practice to a regulatory obligation, with real enforcement powers and significant financial exposure. Organizations developing, embedding, or relying on AI must begin laying governance foundations now.

The EU AI Act classifies AI systems according to four levels of risk. Unacceptable-risk systems such as government-operated social scoring, real-time biometric identification in public spaces (with limited exceptions), and AI systems that exploit vulnerabilities or manipulate behavior are prohibited entirely. High-risk systems, including AI used in employment decisions, essential services, credit scoring, and insurance pricing, are permitted but subject to strict technical documentation, quality controls, and conformity assessments. Limited-risk systems, which include chatbots, generative AI tools, and AI-manipulated media, are subject to transparency and disclosure requirements that already apply today. Minimal-risk systems remain widely unregulated. Compliance under the Act depends heavily on the role your organization plays.

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EU AI Act Article 11122025 v2.pdf

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