AI Act: Why companies need to act now

The AI Act of the European Union (EU) is not just a law - it is a game changer. It defines what is meant by artificial intelligence (AI), lays down strict rules and provides clarity. But time is pressing: Companies have until the end of 2025 to adapt their AI systems in order to avoid strict sanctions.

A far-reaching definition of AI

The AI Act defines artificial intelligence as systems that can "generate certain outputs and support decisions in an automated and data-based manner". This definition is deliberately broad and includes not only traditional AI methods such as machine learning or deep learning, but also systems that use algorithms or decision trees.

Examples of affected systems:

• • Recommendation engines such as in online stores or social media platforms.
  • Credit assessment algorithms that evaluate customer data.
  • Automated monitoring systems in the security industry.

Note: Technologies that do not directly identify themselves as "AI" can also fall under the AI Act. Companies must therefore think beyond traditional AI applications.

Prohibitions: AI systems that are not permitted

A central component of the AI Act is the absolute ban on certain AI applications that violate fundamental rights and ethical standards. These include:

1. social scoring

AI systems that evaluate people's behavior or personal characteristics in order to classify them socially are prohibited. Example: Evaluation systems that restrict access to the labor market or financial opportunities for citizens based on their behavior.

2. manipulation and exploitation

Technologies that deliberately exploit people's vulnerabilities - for example through psychological manipulation - are prohibited. Example: Systems that tempt children into excessive consumption.

3. real-time biometrics

The use of AI for facial recognition or behavioral analysis in public spaces is generally prohibited, unless there are explicit legal exceptions.

4. subtle influence

Systems that unnoticeably influence people's freedom of choice, such as manipulative advertising that uses hidden algorithms.

Why companies need to act now

1. wide area of application

The far-reaching definition of the AI Act means that many companies are affected, even if they do not yet use any explicit AI systems. Even simple data-driven systems could fall under the new regulations.

2. strict deadlines

• January 2025: Adoption of the final legislative text.
• Mid-2025: Start of conformity tests.
• December 2025: Full implementation required.

3. high penalties

Violations of the AI Act can be penalized with up to 30 million euros or 6% of annual global turnover. These penalties could hit smaller companies particularly hard.

Steps that companies need to take now

1. system inventory

• Identify all AI and AI-like systems in the company.
• Perform a risk assessment to identify systems with potential compliance gaps.

2. develop a compliance strategy

• Set up internal control mechanisms to ensure compliance.
• Develop transparency reports and ensure that all algorithms are traceable.

3. implement technical and organizational measures

• Data management: Ensure that all data sets used are of high quality, transparent and non-discriminatory.
• Auditing: Implement tools to continuously check algorithms.
• Transparency: Develop user information that meets the requirements of the AI Act.

4. consult experts

As the requirements are extensive and complex, external support from lawyers, compliance experts and AI specialists can be crucial.

5. employee training

• Sensitize your teams to the new legal requirements.
• Conduct regular training on the ethical use of AI

Opportunities through early compliance

The AI Act not only harbors risks, but also considerable opportunities for companies that act early:

1. Strengthening reputation: Companies that adhere to the guidelines at an early stage signal responsibility and a willingness to innovate.
2. Secure market share: Early implementation gives companies an edge over their competitors.
3. Promoting innovation: Compliance with the standards can lead to higher efficiency and quality of AI applications.

Conclusion: the clock is ticking

Companies only have around one year to adapt their AI systems to the new requirements - an extremely short period of time for far-reaching adjustments. With the broad definition of AI, the clear prohibitions and the strict deadlines, the AI Act offers challenges, but also opportunities for companies that prepare for it early on.

Act instead of wait: Do you want to make sure your company is AI Act compliant?