World nations have been working on building AI regulation. One of the milestone developments in recent times was when the European Union passed the AI Act. It was the first comprehensive framework for constraining the risks of artificial intelligence (AI). The parliament approved the AI Act after 523 votes were polled in favour, 46 against, and 49 abstentions.

The AI Act works by classifying products according to Risk and adjusting scrutiny accordingly. According to its creator, the act would make tech more "human-centric."

According to MEP Dragos Tudorache, The AI Act is not the end of the journey but the starting point for new governance built around technology.

The act places the EU at the forefront of global attempts to address the dangers associated with AI. According to a BBC report, Enza Iannopollo, principal analyst at Forrester, stated that adopting the AI Act marks the beginning of a new AI era, and its importance cannot be overstated. She believes the EU AI Act is the world's first and only set of binding requirements to mitigate AI risks.

The primary idea of the law is to regulate AI based on its capacity to cause harm to society. The higher the Risk, the stricter the roles. As per the act, AI systems are considered high-risk and must comply with strict requirements. High-risk systems include those used in critical infrastructure, education, healthcare, law enforcement, border management, and elections.

Understanding the AI act

According to the EU, the AI Act aims to provide AI developers and deployers with precise requirements and obligations regarding specific uses of AI. At the same time, the regulation seeks to reduce administrative and financial burdens on businesses, particularly small and medium-sized enterprises (SMEs).

The AI Act is part of a more comprehensive package of policy measures to support the development of trustworthy AI, including the AI Innovation Package and the Coordinated Plan on AI. Together, these measures will guarantee the safety and fundamental rights of people and businesses regarding AI and strengthen uptake, investment, and innovation in AI across the EU.

Why do we need rules on AI?

The AI Act ensures that Europeans can trust what AI has to offer. While most AI systems pose limited to no risk and can contribute to solving many societal challenges, specific AI systems create risks that we must address to avoid undesirable outcomes.

The AI Act establishes obligations for AI based on its potential risks and level of impact on individuals and society as a whole. Accordingly, AI systems are divided into systems of limited Risk and those posing high Risk. In addition, specific AI systems are prohibited. The Regulatory Framework defines four levels of Risk for AI systems:

• Unacceptable Risk
• High Risk
• Limited Risk
• Minimal Risk or no risk

GPAI systems and foundation models

This was a vital area of the last-minute negotiations. Dedicated rules for general-purpose AI systems will ensure transparency along the chain. These rules include drawing up technical documentation, complying with EU copyright law, and providing detailed summaries of the content used for training. 

In the end, it was agreed to ban specific high-risk AI systems considered a clear threat to people's fundamental rights. These include biometric categorisation systems that use sensitive characteristics, untargeted scraping of facial images from the internet or CCTV footage to create facial recognition databases, emotion recognition in the workplace and educational institutions, social scoring based on social behaviour or personal characteristics, AI systems that manipulate human behaviour to circumvent their free will and the ones used to exploit the vulnerabilities of people.

The act also creates provisions to tackle risks presented by the systems underpinning generative AI tools and chatbots such as OpenAI's ChatGPT. These would require producers of general-purpose AI systems that can be harnessed for various tasks to be transparent about the material used to train their models and comply with EU copyright law.