Why pending AI laws are prompting businesses to panic 

This article was first published by Digiday sibling WorkLife

Businesses are starting to panic over the artificial intelligence regulations coming down the pike in Europe. Perhaps for good reason. 

Once the European Union’s AI Act comes into fruition, any business that flouts its guidelines around the responsible and ethical use of AI, faces eye-watering fines that make even the hefty penalties brought by the General Data Protection Regulation (GDPR) seem like small potatoes. Companies that fail to adhere to the AI law will be on the hook for fines that equate to 7% of global annual turnover (GDPR fines were capped at 4%) or up to €40 million ($44 million) in fines (GDPR fines were a maximum of €20 million). 

A host of C-suite executives from large organizations including Airbus, Meta, Renault and Siemens have appealed to the European Parliament, to water down the potency of the AI Act, on the grounds that it could stifle technology innovation across Europe. And OpenAI has also reportedly begun furtively lobbying to dilute the Act, to reduce the regulatory burden on the company, according to Time.

Legal counsels believe they may have good grounds for doing so. “In the desire to be setting the world-leading tone of regulation I think the EU may have gone too far in a market that is still relatively nascent,” said Emma Wright, director of the Institute of AI and head of the tech, data and digital team for London-based law firm Harbottle and Lewis, which specializes in advising tech and media sectors. “The definitions [in the Act] are currently so broad that they will capture things that aren’t intended to be captured.”

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