AI Regulation: What Businesses Need to Know

AI regulation has moved from discussion to implementation. Here's what businesses need to understand and how to prepare.

The Regulatory Landscape

EU AI Act

Now in effect:
• Risk-based classification
• Prohibited uses defined
• High-risk requirements
• Transparency obligations

Key requirements:
• Risk assessments
• Data governance
• Human oversight
• Technical documentation

US Approach

Executive orders and guidance:
• Agency-specific requirements
• Sector regulations
• State-level laws emerging
• Voluntary commitments

Global Considerations

Risk Categories

Unacceptable Risk (Prohibited)

High Risk

Subject to requirements:
• Employment decisions
• Credit scoring
• Education access
• Healthcare diagnostics
• Legal assistance

Limited Risk

Minimal Risk

Compliance Requirements

For High-Risk AI

Technical requirements:
• Quality management
• Data governance
• Technical documentation
• Record keeping
• Human oversight
• Accuracy and robustness

Organizational requirements:
• Conformity assessments
• Registration in EU database
• Incident reporting
• Post-market monitoring

For All AI

Best practices:
• Transparency about AI use
• Fair and non-discriminatory
• Privacy compliance
• Security measures

Implementation Steps

1. AI Inventory

Catalog your AI systems:
• What AI do you use?
• What does it do?
• Who does it affect?
• What data does it use?

2. Risk Classification

Assess each system:
• Risk category
• Regulatory applicability
• Compliance gaps

3. Gap Analysis

Identify needed changes:
• Technical requirements
• Documentation needs
• Process updates
• Governance structures

4. Remediation

Address gaps:
• Update systems
• Create documentation
• Implement oversight
• Train staff

5. Ongoing Compliance

Continuous activities:
• Monitoring
• Incident handling
• Regular assessments
• Updates for changes

Practical Considerations

Documentation

Create and maintain:
• System descriptions
• Training data records
• Performance metrics
• Risk assessments
• Incident logs

Governance

Establish:
• Clear ownership
• Review processes
• Escalation paths
• Audit procedures

Third-Party AI

Address vendor AI:
• Due diligence
• Contractual requirements
• Ongoing monitoring
• Shared responsibilities

Looking Ahead

Expect:
• More jurisdictions acting
• Requirements evolving
• Enforcement increasing
• Best practices emerging

Navigating AI compliance? We help businesses understand and implement AI governance requirements.