Exploring Generative AI Risk Assessment and Regulatory Compliance
Jul 26, 2024
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David Rosenthal, a Partner at VISCHER, shares his expertise in data and technology law with over 25 years of experience. He dives into the intricacies of the EU AI Act, discussing the challenges organizations face in compliance and how it could stifle innovation. The conversation also introduces a generative AI risk assessment tool aimed at helping organizations mitigate potential risks. Finally, they reflect on the future of AI integration into daily life and the need for adaptation amid evolving regulations.
The EU AI Act establishes a categorized risk framework for AI applications, guiding organizations to identify and manage compliance obligations accurately.
To navigate regulatory compliance complexities, companies can utilize generative AI risk assessment tools that provide structured frameworks for evaluating and documenting risks.
Deep dives
Understanding the EU AI Act
The EU AI Act categorizes AI applications into four risk levels: unacceptable, high, limited, and minimal. Unacceptable risks refer to applications that are prohibited, such as social scoring and emotion recognition in workplace settings. High-risk applications, which are subject to strict regulations, include AI systems used for assessing job candidates or determining creditworthiness. The Act's focused approach aims to regulate these higher-risk products rather than general AI concerns like bias, making it essential for companies to identify which applications fall under these categories.
Implications of Non-Compliance
Companies that fail to comply with the EU AI Act could face substantial fines, potentially reaching up to 7% of global annual turnover. While immediate penalties are unlikely, businesses need to prepare as key provisions of the Act will take effect in the coming years. An essential first step for organizations is to inventory their AI usage to determine its regulatory status, categorizing themselves as either deployers or providers of AI technologies. Proper understanding and preparation will be necessary to mitigate risks and align with compliance requirements.
Challenges in AI Regulation and Innovation
Regulatory compliance with the EU AI Act may create challenges, particularly concerning the clarification of risks and the need for comprehensive understanding at the board level. Companies often face fear, uncertainty, and doubt about AI technologies, leading to excessive caution that may inhibit innovation. The requirement for explainable AI complicates matters further, as it clashes with the reality that complex models, such as neural networks, can yield unpredictable results. Organizations must work to balance their compliance efforts with a pragmatic understanding of AI's capabilities and potential risks.
Tools for Risk Assessment in AI Projects
Businesses can leverage resources like generative AI risk assessment tools to systematically identify and manage risks associated with AI technologies. These tools help companies conduct structured risk assessments, offering frameworks to evaluate potential impacts and document responses. By facilitating a thorough understanding of risks, these assessments promote a proactive approach to compliance and management, ensuring that organizations remain ahead of regulatory requirements. The open-source nature of these tools allows broad accessibility, encouraging more companies to adopt best practices in risk management.
In this episode of the MLSecOps Podcast we have the honor of talking with David Rosenthal, Partner at VISCHER (Swiss Law, Tax & Compliance). David is also an author & former software developer, and lectures at ETH Zürich & the University of Basel.
He has more than 25 years of experience in data & technology law and kindly joined the show to discuss a variety of AI regulation topics, including the EU Artificial Intelligence Act, generative AI risk assessment, and challenges related to organizational compliance with upcoming AI regulations.
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