The scope of the EU AI Act will apply to all companies whose AI systems are used or affect EU-based individuals, according to Claude-Etienne Armingaud, a partner in K&L Gates’ Paris office and a member of the law firm’s technology transactions and sourcing practice group.
Due to its breadth, global companies developing AI systems, most of which are headquartered either in the U.S. or in China, will face two options: “Get in line with the EU AI Act or abstain from the EU market,” Armingaud said.
Some companies threatened to exit the European market after the EU’s General Data Protection Regulation, or GDPR, became effective in 2018, but many didn’t actually follow through, according to Armingaud.
“So, without a doubt, all companies dabbling in AI will need to comply if they truly want to remain global,” he said.Agenda – New EU AI Rules Will Have Global Impact
While Capitol Hill is inundated with proposed privacy legislations from the Data Breach Prevention and Compensation Act (DBPCA), the CLOUD Act and the ENCRYPT Act, organizations the world over are trying to understand how to get their own regulations deemed adequate enough to ensure the flow of business in the EU, now that GDPR is a reality.