The European Union AI Act: Time to start preparing

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The EU AI Act represents a significant regulatory step for AI systems and may influence other jurisdictions globally [1][35][36] - Organizations that establish robust AI governance are likely to experience annual growth rates of at least 10% [4] - A majority of organizations in the EU lack mature AI risk governance, with 71% of surveyed organizations indicating their governance is underdeveloped [5][17] Summary by Sections AI Governance and Risk Management - Only 30% of organizations consider their AI risk governance to be mature, with many lacking fundamental risk controls [6][22] - Concerns regarding AI governance include data, model output, security, third-party, and societal risks [6][10] - Less than 10% of organizations have fully addressed the key requirements of the EU AI Act [13][19] Implementation Challenges - Nearly 50% of organizations have not allocated any budget for EU AI Act implementation, with most budgets set at €2 million or less [15][20] - Key challenges include unclear obligations, complexity of regulations, and talent shortages [29][30] - Only 25% of organizations have implemented strategies for regulatory compliance or AI risk management [16][17] Data Management and Compliance - The EU AI Act introduces requirements for data management, including bias examination and ensuring representative data use [23] - More than half of the surveyed organizations have not yet addressed data governance requirements [22][23] - Organizations are encouraged to define their governance and compliance strategies to align with the EU AI Act [32][33] Future Outlook - The EU AI Act is expected to serve as a blueprint for AI regulation in other jurisdictions [1][35] - Organizations are advised to accelerate their planning for compliance to avoid chaos as deadlines approach [30][31] - Embracing responsible AI governance can foster innovation and build trust among stakeholders [36]