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The EU Artificial Intelligence Act, proposed by the European Commission in April 2021, represents a groundbreaking effort to regulate AI technologies across the European Union. The act’s main objectives are to ensure the ethical use of AI, safeguard fundamental rights, promote innovation, and contribute to the economic growth of the EU. It is based on a risk-based approach that determines the extent of regulation and oversight required for each AI application.
AI widespread adoption has the potential to boost efficiency, reduce costs, and increase competitiveness for businesses, positively impacting the EU economy. Among others, the financial industry is leveraging AI for risk assessment, fraud detection, algorithmic trading, and customer service. Regulation in this sector is essential to prevent market manipulation, protect investors, and ensure the stability of the financial markets. The AI Act’s approach to regulating AI startups and small businesses is of particular economic significance. Striking the right balance between fostering innovation and ensuring responsible AI use will determine the growth and competitiveness of these startups, which are often at the forefront of technological advancements.
As the EU sets clear guidelines for AI deployment, it is likely to attract increased investment in AI research and development. This can lead to the creation of high-quality jobs, technological innovation, and further economic growth. The EU Artificial Intelligence Act represents a significant step forward in regulating AI technologies, with far-reaching economic and financial implications. Member states’ positions vary, reflecting the diverse economic interests and concerns within the EU.
Member states of the EU play a crucial role in shaping the implementation of the AI Act. Opinions on the proposed regulation vary among member states due to differences in national AI strategies, economic interests, and concerns about regulatory overreach. For Germany an harmonized EU framework is essential to prevent fragmentation in the single market and ensure AI’s ethical use, which, in turn, can boost economic competitiveness. The French government believes that this act will help protect European values and maintain a competitive edge in AI, driving economic growth. Poland, like several other Eastern European countries, has expressed concerns about excessive regulation that might stifle AI innovation. They advocate for a more flexible approach, especially for startups and small businesses, in a bid to foster economic entrepreneurship. The Netherlands emphasizes the need for clear rules and enforcement mechanisms, especially in sectors like healthcare and transportation, where AI applications can have significant societal consequences and financial implications. Sweden seeks to ensure that the AI Act does not hinder the development of AI technologies, particularly in the context of digital transformation and economic growth. These varying positions highlight the complex task of achieving a consensus among EU member states, each with its own set of economic priorities and concerns related to AI.
Written by: Nenad Stekić