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AI Act: A Landmark for Regulating Artificial Intelligence Applications

Fabrizio Milano d'Aragona

The European Union has taken a significant step towards regulating Artificial Intelligence with the approval of the AI Act by the European Parliament on June 14, 2023. This legislative act represents the first regulation of Artificial Intelligence and aims to protect the rights and values of the EU.

The final approval process is expected to be completed by the end of the year, and it is hypothesized that the new rules will come into effect between 2024 and 2025. Before becoming law officially, the details of the regulation will need to be discussed with the Council of the EU and the European Commission.

The AI Act establishes a unified legal framework to regulate the development, marketing, and use of AI systems while ensuring compliance with regulations and safeguarding citizens and businesses. This represents an important step that has solidified the EU’s determination to be a global leader in technology regulation.

The AI Act is part of the broader strategy “A Europe fit for the digital age” outlined by the European Commission. The text defines risk levels associated with different AI systems and classifies their applications based on their level of danger. “Unacceptable risk” systems, which pose a threat to people and their rights, are prohibited.

For example, concrete applications like generative AI models, such as ChatGPT by OpenAI and Bard by Google, will be allowed, along with the use of their output, provided that the latter is clearly labeled as AI-generated.


Datrix’s Perspective on the AI Act

These European measures on AI are an important step in addressing challenges related to the evolution of artificial intelligence. However, it is indeed just the first step, and we will need to wait to understand the evolution of the regulations and how they will be implemented.

Defining principles and guidelines for protecting citizens in AI usage is undoubtedly necessary and positive. Nevertheless, the way these rules are formulated will make all the difference. It is crucial to actively involve actors with technical and business expertise in creating regulations, as their decisions will have a significant impact on industrial development.

The fact that institutions are discussing AI-related issues indicates their crucial importance in the current context. These issues are particularly critical in promoting industrial development, but it is equally essential to avoid being too rigid in regulating every aspect. The transition to a more conscientious use of artificial intelligence is inevitable, but regulations must not be obstructive, and rules should be clear and comprehensible.


AI Act: between regulation and progress, protection and innovation

Blocking European companies, especially SMEs and startups, in this process is unthinkable, as it poses a challenge due to the risk of falling behind compared to other international entities. While regulations are necessary, it is equally important to provide resources and incentives to companies and the ecosystem to effectively integrate and implement AI in compliance with established rules.

As with digital transformation, which initially had slow adoption in Italy and other European Countries before accelerating following the pandemic, we must support and not hinder change. During digitalization, web giants were already emerging and innovating how people consume daily services, with users heavily engaged in online and e-commerce activities, while governments were discussing how to regulate it.

It should be emphasized that AI algorithms and systems evolve at a rapid pace, making it essential to set clear boundaries while avoiding excessive bureaucratic complications. Excessive constraints might necessitate continuous regulatory updates. Therefore, an equilibrium between regulation and flexibility is needed to ensure adequate development and utilization of AI within the European and global context.

The primary objective of regulations should be to assist companies in transforming and understanding the real needs of contemporary society.

Currently, AI is widely applied by major digital players and financial operators, but many sectors and functions are beginning to take their first steps in this direction. In this sense, AI models designed to optimize industrial and energy processes will become increasingly crucial in the near future.

AI’s usefulness lies in its ability to process exponentially increasing data. However, these data must be interpreted and utilized; otherwise, they become an additional cost and complexity for businesses. Strategically leveraging AI means improving operational efficiency and ensuring better optimization of time, space, and resources.