The Plan does this by outlining a strategy that will focus in providing clear rules on AI, creating the appropriate infrastructure for AI development, providing high quality data for AI purposes, stimulating the development and adoption of AI algorithms and ensuring the workforce is equipped with the necessary AI skills.

Regulatory Backdrop

The European Commission has been pioneering in the adoption of the EU Artificial Intelligence Act (the “AI Act”). The AI Act is often compared with the GDPR which is widely lauded as the global standard for data protection. While many hope that the AI Act will forge a similar path to global adoption, there are mixed views as to whether that is achievable particularly given that there is no concept analogous to the “adequacy decision” under the GDPR and there is therefore perhaps less motivation for other countries and regions to align their artificial intelligence regulation with the AI Act. The European Commission has already announced several initiatives in an effort to position the European Union as the market leader for AI, such as the deployment of AI factories and the InvestAI facility, and those initiatives are incorporated into the Plan.

Balancing the regulatory approach

Since artificial intelligence began to gain major traction in 2023, we have seen rapid advancements in the technology with new AI models continuing to be launched across the globe on a daily basis. Given the pace of development, legislators around the world continue to struggle in deciding how best to regulate artificial intelligence in a manner which protects privacy and intellectual property rights, but which also fosters innovation and harnesses the efficiencies that artificial intelligence offers. For many, the AI Action summit held in Paris earlier this year has been viewed as an inflection point for European legislators, with a suggestion that perhaps the propensity to regulate may stymie innovation and therefore market growth. It is possible that we will see a shift towards “soft law” in the wake of this realisation and in acknowledgment of the cascade of hard law which has emanated from Brussels over the last five years, particularly in the data and digital space.

Industry Concerns

A major concern from industry to date has been that the AI Act as a horizontal piece of legislation fails to account for industry specific nuances, particularly where detailed sectoral legislation and regulation already exists. For many businesses, the pathway to compliance in respect of the AI Act is unclear. While many industries have pre-existing regulatory authorities in place to govern them, given the European Commission’s central role in the interpretation of the AI Act, those existing regulators are not currently empowered to advise businesses of how the AI Act is to be interpreted in relation to their specific sector. As the AI Act has horizontal application, the European Commission has become somewhat of a bottleneck in terms of providing the interpretations required in a timely manner and in a way which is accessible to both large and small businesses. In clear response to this concern, the Plan acknowledges that the “Member States and the Commission, including its AI Office, must step up their efforts to facilitate a smooth and predictable application of the AI Act” and announces the establishment of the AI Act Service Desk which will allow stakeholders to pose questions regarding the AI Act and receive bespoke answers, a move which will be greatly appreciated by businesses across the Union.

Conclusion

While many have criticised the European Union for its propensity to legislate, regulation does at least provide a level of certainty for businesses that operate within the European Union and presents businesses with the ability to easily access the markets in every country across the European Union without mass fragmentation in the approach to the regulation of artificial intelligence.