President Donald Trump’s budget reconciliation bill almost included a decade-long moratorium on AI regulation at the state and local levels, but this provision was ultimately removed by the Senate. As a result, states remain free to create their own regulations for AI, highlighting ongoing debates about consumer protection and innovation in the sector.
The rising use of unapproved AI tools, known as shadow AI, poses significant compliance and reputational risks for organizations, particularly in regulated sectors such as finance and healthcare. As employees turn to these tools when sanctioned options are lacking, it is crucial for companies to adopt a proactive approach to AI integration and governance.
The EU AI Act, which came into force on August 1, 2024, establishes a framework for regulating artificial intelligence based on risk levels associated with AI systems. This legislation aims to enhance user confidence and foster innovation while imposing significant penalties for non-compliance.
The EU AI Act categorizes artificial intelligence into three risk classes: “unacceptable,” “high,” and “low/minimal,” with strict regulations for high-risk systems. It aims to ensure compliance among providers and users of AI systems, impacting various sectors and workplaces.