EU pioneers global AI regulation with the passage of the Artificial Intelligence Act (AI Act) on March 13, 2024. The Act, born from a 2021 proposal, marks a milestone in balancing technological advancement with risk management. It received overwhelming support in the European Parliament with 523 votes in favor, 46 against, and 49 abstentions.
Article 2 of the AI Act extends its jurisdiction to all AI providers, regardless of location, whose output affects the EU. Article 3 defines an AI system as a machine-based system designed for varied autonomy levels, capable of adaptiveness post-deployment, and generating outputs such as predictions and decisions.
The Act classifies AI into 𝐟𝐨𝐮𝐫 𝐜𝐚𝐭𝐞𝐠𝐨𝐫𝐢𝐞𝐬 based on risk: Prohibited, high-risk, limited-risk, and minimal-risk. Practices deemed a threat to citizens, including manipulative techniques and intrusive biometric identification systems, are explicitly banned.
The Union adopts a risk-based approach, imposing more restrictions on AI usage. The law allows time for developers and providers to adapt, with enforcement staggered over 6 to 36 months. Punitive measures for prohibited practices take effect within six months, while obligations for high-risk AI commence approximately 36 months later.
In contrast, 𝐈𝐧𝐝𝐢𝐚’𝐬 approach involves ongoing policy formulation, led by the Ministry of Electronics and Information Technology (MeITY) and 𝐍𝐢𝐭𝐢 𝐀𝐚𝐲𝐨𝐠, 𝐆𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐨𝐟 𝐈𝐧𝐝𝐢𝐚. Committees are working to establish a comprehensive AI policy framework, guided by principles such as safety, inclusivity, and accountability. Earlier, 𝐍𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲 𝐨𝐧 𝐀𝐫𝐭𝐢𝐟𝐢𝐜𝐢𝐚𝐥 𝐈𝐧𝐭𝐞𝐥𝐥𝐢𝐠𝐞𝐧𝐜𝐞 (𝐍𝐒𝐀𝐈) was released although the legislation is yet in making.
Meanwhile, in the securities markets, the SEBI has embraced AI for surveillance, investigations and enforcement. One of its WTMs recently made a public statement regarding this, at ANMI and NSE India. However, concerns persist regarding the potential for errors, hallucinations and legal challenges associated with its use.
The text of the AI Act is available at: https://lnkd.in/gBu2z64C
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