🇪🇺 EU AI Act: What it Means for Your Company and How to Prepare

Jul 28

📌 In our previous article "The EU AI Act Explained: Understanding Europe's Landmark AI Regulation," we summarized a couple of key points of one of the world's first comprehensive legal frameworks for Artificial Intelligence and outlined its key objectives and implementation timeline.

For any company operating within or offering services to the EU, this Act is incredibly important, since it dictates how AI systems can be developed, placed on the market, and used. Below, we'll dive into what these regulations mean directly for business and give some tips on how you can proactively prepare.

🔎 Why this matters for your business:

❗️Understanding & Managing AI Risks: The Act's classification helps you identify which AI tools are safe for your operations and which might pose significant risks to your data, security, and integrity. This is vital whether you develop AI or simply use it for automation.

⚠️ High-Risk AI Systems are those with potential to harm health, safety, or fundamental rights and therefore, come with strict obligations. Think AI in medical devices, industrial machinery, vehicles, for employee management (like resume screening) or even access to essential services (like credit scoring). If your company uses AI in these areas, expect rigorous requirements.

🧩 Building Trust & Reputation: Adhering to the Act's principles of transparency, accountability, and human oversight builds confidence with customers, partners, and employees.

⚡️ Mitigating Legal and Financial Risks: Non-compliance can lead to massive penalties (up to €35 million or 7% of global annual turnover). Beyond money, it can severely damage your operations and reputation.

♟️Gaining a Competitive Edge: Companies that proactively embrace robust AI governance will likely stand out, attracting new clients and partners, especially in highly regulated sectors.

🎯 Practical Steps for Timely Compliance and Safe AI Usage

The upcoming deadlines and ongoing obligations of the EU AI Act may have significant implications for your company's operations. To ensure timely compliance and foster safe, effective AI usage, consider these proactive steps:

🚓 Boost AI Cybersecurity: The Act emphasizes strong cybersecurity, especially for high-risk AI. Conducting AI-specific security audits, penetration testing, and integrate secure practices into your AI lifecycle (whether you're buying or building AI solutions) may be a good way to prepare.

👩‍💻Design for Human Oversight in Automation: AI automation offers huge benefits, but the Act mandates human involvement, especially for high-risk systems. Review automated workflows (e.g., in HR, finance, healthcare) where human oversight is critical. Design processes with human-in-the-loop mechanisms and clear protocols for intervention.

✅ Strengthen Operations & Compliance:

🚦AI Inventory & Risk Classification: Take stock of all AI systems your company uses or plans to use. Classify them (unacceptable, high, limited, minimal risk) to understand your specific obligations and spot vulnerabilities. 📋

📓 Documentation & Record-Keeping: For high-risk AI, extensive documentation is required. Establish strong data governance and clear record-keeping for all AI systems.

🔎 Transparency & Explainability: Be prepared to explain how your AI systems function and make decisions, especially for high-risk applications. Demand clear explanations from AI providers.

🎓 Employee AI Literacy Training: Provide ongoing training. Ensure everyone interacting with AI understands its capabilities, limitations, and ethical considerations. Empower your staff to use AI responsibly.

Is your company ready for the EU AI Act❓

This is not just another regulatory hurdle; it is a key opportunity to develop more responsible, trustworthy and ultimately successful AI strategies. Although the rapid pace of innovation in LLMs makes it difficult to manually assess and document the GenAI solutions used or developed within a company, compliance doesn't have to be complicated. Ensuring the legally compliant use of modern AI requires specific, automated AI compliance management.

Our customisable AI Compliance Solution is built to help you ensure EU-wide compliance and company-wide security, while also fostering a centralised knowledge base for your teams:

✅ Automatic risk assessment & documentation

✅ All requirements at a glance - in real time

✅ Links to all legal texts

✅ LLM models from all manufacturers always up to date

✅ Protection against penalties and legal risks

Here’s a sneak-peak of our AI compliance solution (“AI Comply”):

Luiza Gehrke