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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 8 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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Today marks the entry into force of the EU Artificial Intelligence Act (the “AI Act”), a landmark regulation that sets out a comprehensive framework for the development, deployment, and use of AI systems and AI-generated outputs in the European Union. As we previewed in our <a href="https://www.thompsonhine.com/insights/european-union-reaches-provisional-agreement-on-ai-legislation/" target="_blank" rel="noreferrer noopener">client update</a> back at the end of 2023, this is a broad-reaching regulation, covering both traditional and generative AI. The AI Act applies to any person or company that develops, sells, or uses AI systems in the EU, as well as any output from an AI system that is used in the EU, regardless of where the AI systems are developed or used.

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The AI Act introduces a number of obligations and prohibitions for AI systems and general-purpose AI models, with obligations varying based on the amount of risk associated with the AI system and use case. It also establishes a governance structure at the EU level, as well as market surveillance and enforcement mechanisms to ensure compliance and address potential risks. Non-compliance faces potentially significant penalties, which can reach up to the greater of €35 million or 7% of the total worldwide annual turnover. Below is an overview of the scope of the AI Act and key compliance dates to be tracked.

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Before diving into some details behind the AI Act, the following definitions are critical to understanding and evaluating the potential applicability of the regulation on an organization.

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The AI Act has a broad reach, applying to:

Most broadly, the AI Act applies to any output produced by an AI system and used in the EU.

How Are AI Systems Categorized Under the AI Act?

The AI Act utilizes a risk-based approach in regulating AI systems, distinguishing between four levels of risk:

Both developers and users of high-risk AI systems have the most cumbersome compliance journey, as they must comply with strict requirements for risk management, data governance, technical documentation, transparency, human oversight, accuracy/robustness, recordkeeping, among others.

Among the various dates within the AI Act, below are important milestones and deadlines:

This is a quickly evolving area which includes recent state legislative activity in the United States, and we will be providing further updates. If you have questions as to whether you are covered under the AI Act or ready to start developing your compliance strategy as either a developer or user of AI, please reach out to <a href="https://www.thompsonhine.com/professionals/julie-d-honor/">Julie Honor</a> or any member of our <a href="https://www.thompsonhine.com/services/artificial-intelligence/">AI practice</a>.

https://admin.thompsonhine.com/wp-content/uploads/2024/08/Thompson-Hine-Artificial-Intelligence-Update-The-Broad-Reaching-EU-AI-Act-Goes-Into-Effect-Today.pdf

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This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgement of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

This document may be considered attorney advertising in some jurisdictions.

The Broad-Reaching EU AI Act Goes Into Effect Today: Why You Might Fall Into Its Scope

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