How the EU AI Act Will Affect European Projects and Funding

13th September 2024

 

The European Union is moving to regulate artificial intelligence (AI) with the proposed EU AI Act. This legislation aims to make AI technologies safe, ethical, and transparent. For organizations involved in European projects, understanding the EU AI Act is crucial, as it will influence future funding opportunities, project planning, and compliance requirements. This post explains what the EU AI Act entails and its implications for European project funding.

What is the EU AI Act?

The EU AI Act is a legislative proposal from the European Commission to regulate AI systems in the EU. It aims to create a set of rules that balance innovation with fundamental rights and safety. The Act introduces a risk-based framework, categorizing AI applications into four levels of risk: unacceptable, high, limited, and minimal. High-risk AI systems are subject to stricter requirements. You can read more about the EU AI Act on the European Commission's official website.

Key Elements of the EU AI Act:

  1. Risk-Based Classification:

    • The Act organizes AI applications into four categories:
      • Unacceptable Risk: AI systems that pose a clear threat to safety, livelihoods, and rights (e.g., social scoring by governments) are prohibited.
      • High Risk: AI systems used in critical sectors like healthcare, education, and law enforcement must meet specific requirements.
      • Limited Risk: AI systems requiring transparency, such as chatbots, must inform users that they are interacting with AI.
      • Minimal Risk: AI systems with low or no risk have minimal obligations. The European Parliament Research Service provides a detailed breakdown of these risk categories.

  2. Requirements for High-Risk AI Systems:

    • High-risk AI systems must comply with rules related to data governance, documentation, transparency, human oversight, and robustness. These regulations are meant to ensure that AI applications are reliable and fair.

  3. Penalties for Non-Compliance:

    • The Act includes significant fines for non-compliance, potentially up to 6% of a company’s annual global turnover. This makes it crucial for any organization using AI in their projects to adhere to these regulations.  For more on penalties and enforcement, see this article by the European Digital Rights (EDRi).

Impact of the EU AI Act on European Project Funding

The introduction of the EU AI Act will significantly affect organizations applying for EU funding, especially those involving AI. Here’s how the Act will impact project planning, funding applications, and execution:

  1. New Compliance Requirements:

    • Projects involving AI must now consider the EU AI Act’s requirements from the proposal stage. Organizations will need to conduct detailed assessments of the risk levels of their AI applications and ensure they meet the relevant standards. High-risk AI projects will need thorough documentation and testing to comply with the Act.

  2. Effect on Funding Opportunities:

    • The Act may influence which projects receive funding. Projects involving high-risk AI could face greater scrutiny during the evaluation process. At the same time, projects that focus on creating AI solutions that meet the Act’s standards could see increased funding opportunities.

  3. Encouraging Ethical AI Development:

    • The EU AI Act promotes ethical AI development. Projects that focus on transparency, accountability, and ethical standards are more likely to align with EU funding priorities. This may encourage researchers and developers to work on AI systems that are both safe and socially beneficial. For a deeper dive into ethical AI, the Alan Turing Institute provides extensive resources.

  4. Increased Costs for Compliance:

    • Projects involving high-risk AI will need to budget for compliance activities, including risk assessments, audits, and documentation. These additional costs will need to be planned for when applying for funding. Proposals will need to clearly outline how they intend to meet the EU AI Act’s requirements and manage compliance expenses.

Preparing for Future AI Regulations in European Projects

Organizations applying for EU funding for AI-related projects must prepare for the changes introduced by the EU AI Act. This involves:

  • Conducting Risk Assessments: Identifying the classification of their AI systems and preparing for the associated compliance needs.
  • Incorporating Compliance into Project Design: Ensuring that project proposals align with the regulations, especially for high-risk AI systems.
  • Staying Informed: Keeping up with updates on the EU AI Act to ensure all project activities comply with new rules.

Conclusion:

The EU AI Act will reshape the landscape of AI innovation and regulation in Europe. For organizations involved in European projects, understanding and aligning with this new framework is essential for securing funding and ensuring project success. By focusing on compliance, ethical AI development, and risk management, project teams can position themselves to take advantage of new opportunities in the evolving field of AI within the EU.

Stay informed about the latest funding opportunities and regulations for European projects involving AI by visiting EUCalls.net. Make sure your projects are well-prepared for the future of AI in Europe!