The European Union officially began enforcing its landmark AI Act, setting a global precedent with the world’s first comprehensive regulatory framework for artificial intelligence. The law, which formally entered into force in August 2024, now mandates strict compliance from companies operating within the EU or providing AI services to its citizens.

The AI Act introduces prohibitions on specific AI systems deemed to pose an “unacceptable risk” to public safety and fundamental rights. These include social scoring systems, real-time facial recognition, biometric categorization based on sensitive attributes such as race, sexual orientation, and gender, and AI tools designed for manipulative purposes.

Organizations that fail to comply with the AI Act face hefty penalties: fines of up to 35 million euros ($35.8 million) or 7% of their global annual revenues, whichever is higher. This surpasses the maximum penalties imposed under the EU’s General Data Protection Regulation (GDPR), which caps fines at 20 million euros or 4% of annual global turnover.

While enforcement has commenced, the AI Act’s rollout is a phased process. Compliance will continue to evolve as new standards, guidelines, and secondary legislation are introduced.