EU AI Act Takes Effect: What Every Business Needs to Know

The EU AI Act is officially in force. If you do business in Europe or serve European customers, this affects you. Non-compliance penalties go up to 35 million euros or 7% of global revenue. This is not optional.

The Act categorizes AI systems by risk level. Unacceptable risk systems are banned outright. High-risk systems face strict requirements. Limited and minimal risk systems have lighter obligations.

Most business automation falls into the limited risk category. This means transparency requirements: you must tell users when they are interacting with AI. Your chatbot needs to identify itself. Your AI-generated content needs disclosure.

High-risk categories include AI used for hiring, credit decisions, and critical infrastructure. These require documented risk assessments, human oversight mechanisms, and detailed technical documentation. The bar is high.

Data quality requirements apply across categories. AI systems must be trained on data that is relevant, representative, and free from errors. You need to document your training data sources and preprocessing steps.

The timeline matters. Some provisions are already active. Others phase in over the next two years. Businesses need compliance roadmaps now, not later.

"

AI is not about replacing humans. It's about amplifying what humans do best while automating what machines do better.

US companies are not exempt. If your AI touches EU residents, EU rules apply. This extraterritorial reach means most global businesses need to comply.

The good news: compliance is achievable. Most requirements align with AI best practices you should be following anyway. Documentation, testing, transparency, and human oversight make AI systems better regardless of regulation.