What Do the New AI Regulations Mean for the AI Sector?

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If you haven’t seen part 1 of our interview with Kevin Butler, founder of Centigy, check it out here.

Last year, the EU released plans for new regulations in the AI sector. We sat down with Kevin Butler, founder of Centigy, to get his thoughts.

What are the first things companies should be doing to prepare for the introduction of these new regulations?

“Companies who use AI systems should conduct an impact assessment. Ask yourself what would happen if the AI systems that I use, that we use in the organization, if they’re switched off overnight, what will happen? Is it business as usual? If that’s a yes, that’s fine. You’re carrying around very little risk.

If it’s any other answer you need to ask your suppliers for assurances that the software they provide to you is AIA-ready. And how you can do that is, is by asking them one question … “Which risk category does this product or software that we’re contracted to use with you, fall into?”

If you’re not happy with the answer – and bear in mind, some of your providers probably will not be ready for AIA yet – we can help them to comply with AIA. So either get in touch with us and we can help you with this risk and impact assessment, or, your suppliers can get in touch with us and we can help them adhere to the new rules.”

To get in touch with Kevin and his team at Centigy, visit their website here.

Which of the new EU regulations do you think will have the most impact?

Severe Penalties for HR Technology Providers. The penalties are in line with GRPR, so that’s €20m or 4% of turnover, whichever is greater. That’s going to drive some change. Organizations are going to think, “Right, will we pass the regulations? Do we change our tools to meet them? Or do we have to switch them off completely? Do we have to pivot and do something else?” 

You’ll probably start to see some change in the roadmaps for HR technology providers, you may see that certain functionality if they give you visibility of it, will be sunset in the future. When is it going to be sunset? Is that a result of the new regulation? Possibly … You’re going to see a change in the roadmaps and where they will invest in their products. 

“Also, there’s a huge push towards transparent AI now as a result of new regulations … You probably heard about the black box effect with AI. Well, there’s a huge push there towards explainability, understanding why an AI took a particular action or made a decision. So that will form part of the foundation for fair AI in the future. 

Also, human agency is a big part of the new regulations. Instead of lifting and shifting our work to AI, outsourcing to AI, it’s now putting people at the center of everything, supported by AI. So there’s a bit more agency. We get given recommendations, we make the decisions, but we’re supported by the power that only AI can provide.”

What will these regulations mean for the AI sector?

“HR technologies that you’re using right now may or may not be in compliance with AIA … The EU has set new rules … the technology that we use must adapt to survive within this new environment.

That may mean that the tech that you’re using right now will change. It may fundamentally change or it may not change at all, or it might be switched off. There are new rules and software must comply with those new rules. If they don’t, they face severe penalties which are in line with GDPR. Those penalties are (a fine of) 20 million euros or 4% of turnover. So there’s a huge incentive for tech suppliers to comply with the new regulations.”

Check out what else Kevin has to say on AI regulations here, in part 3 of our interview. 

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