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Given the proliferation of artificial intelligence (AI) technology across business functions, the EU developed a consolidated, formalized approach to AI regulation for users and developers within the EU. The regulation was adopted in April 2021 and aims to harmonize existing laws and future proof safe AI development. In this report, we help risk management and compliance executives as well as heads of functions shield against AI risk, by offering an overview of the current AI regulatory landscape, breaking down compliance requirements and proposing mitigation strategies for different risk profiles and levels.
Table of contents
EU Artificial Intelligence Act Will Be The Dominant Regulatory Framework Going Forwards
The Current AI Regulatory Landscape Is Complex, Fragmented And Evolving
The Proposed Regulation Aims To Harmonize Existing Laws And Future Proof Safe AI Development
The Regulation Will Create Obligations For Both Developers And Users Of AI
Firms Developing And Deploying High-Risk AI Systems Will Be Subject To Stringent Auditing And Review Processes
Firms Must Allocate Greater Resources To Manage AI Risk
Developers Should Prepare For An Oncoming Wave Of AI Regulation
Table of figures
Figure 1. AI Innovation Is Top Of Mind For Global Real Estate Executives
Figure 2. AI Systems Most Relevant To The Private Sector Affected By The Regulation
Figure 3. Obligations Of Providers Of High-Risk AI Systems
Figure 4. Firm Profiles And Associated Risk Level
Figure 5. Comparison Of Passive, Active And Proactive AI Risk Management Approaches For Medium And High Risk Firms
Figure 6. AI Adoption Rates And Risk By Business Function
Organisations mentioned
Amazon,
European Commission,
European Council,
European Parliament ,
European Union (EU),
Facebook,
Federal Trade Commission (FTC),
FICO,
MMC Ventures,
National Institute of Standards and Technology (NIST),
Simmons & Simmons,
University College London
About the authors
Industry Analyst
Chris is an Industry Analyst in the Verdantix EHS practice. His current research agenda focuses on digital mental health and wellbeing solutions. Chris joined Verdantix in 2020 and has previous experience at EY, where he specialised in robotic process automation (RPA). He holds an M.Eng. in Engineering Science from Oxford University with a concentration in machine learning and machine vision.
Senior Analyst
Victor is a Senior Analyst in the Verdantix Operational Excellence practice. His research agenda focuses on asset management solutions and their overlap with industrial risk management technologies and digital twins. His advisory portfolio includes go-to-market, growth strategy, commercial due diligence and digital strategy projects for corporates, vendors and investors. Prior to joining Verdantix, Victor was a research associate at Imperial College London and Massachusetts Institute of Technology, providing engineering advisory services for clients in the energy industry (oil & gas, nuclear and solar). Victor holds a PhD in Process Engineering from University College London.
Industry Analyst
Hugo is an industry analyst in the Verdantix Operational Excellence practice. His research agenda explores the technologies within the extended reality and connected worker market, alongside enterprise asset management software. In advisory, his work includes go-to-market, growth strategy and long-term research partnerships.
Industry Analyst
Ben is an Industry Analyst in the Verdantix Smart Buildings practice. His current agenda covers hardware and software solutions for energy management, on-site power generation, and COVID-19 mitigation management. He holds an M.Eng in Mechanical Engineering from Durham University,
Global Head of Research and Finance Director
Rodolphe co-founded Verdantix in 2008 and directs the firm’s research strategy across all practice areas. He also leads the Environment, Health & Safety practice on an interim basis. Rodolphe has over twenty years of experience in technology research and strategy consulting. He previously worked for Barclays Bank and L.E.K. Consulting. Rodolphe holds a PhD in Physics from Cambridge University.