As the EU Artificial Intelligence Act (EU AI Act), is due to come into force shortly, Irish businesses are being urged by government agencies to review their existing policies and create an inventory of any AI systems they are using or deploying in preparation for the incoming EU AI Act.
Ireland’s Department of Enterprise, Trade and Employment earlier in the year launched a public consultation, which aims to inform the country’s approach to applying the new EU AI Act.
The new EU AI Act will come into force around 20 days after its publication in the Official Journal of the EU, which is expected to be this month. However, businesses will be happy that most of its provisions will not take effect for another two years after that date.
While the regime will be enforced on a “phased” basis, Irish businesses are being urged to start reviewing existing policies and systems to identify what AI they are already using, such as spam filters, credit scoring systems, recruitment profile systems etc., and seek advice in relation to the risk categories these systems fall under as well as corresponding obligations they need to comply with.
The consequences for non-compliance with AI legislation could lead to a hefty fine of up to €35m or 7% of a business’ worldwide annual turnover. There is also a further worrying scenario for business who provide incorrect or misleading information could also incur fines of up to €7.5m or 1% of annual turnover.
Apple’s recent decision not to launch its own AI features in the EU, reflects its concerns with facing another major charge on its accounts under the new AI legislation.
About a month ago, Apple announced it will not launch its homegrown AI features in the EU, saying that interoperability required by the EU’s Digital Markets Act (DMA) could hurt user privacy and security. A few days later, the Commission accused Apple’s App Store of DMA breaches.
There is another concern of the multinational tech giants, who operate from Ireland, the rush to expand AI across industry requires more and more data centre capacity, which is impacting on their carbon footprint, another of the EU legislative targets.
Google stated that its carbon footprint soared in 2023 by nearly 50% compared to 2019 figures, according to its 2024 Environmental Report.
The cause behind this surge in emissions was the massive amounts of energy Google needed to run its data centres and supply chain operations to ramp up and power its AI initiatives.
It’s not just Google that’s dealing with unsustainable energy demands to keep its AI systems up and running.
Several influential tech firms, including Amazon Web Services, are ratcheting up their search for eco solutions to their expanding need for data centres.
Bord na Móna is set to create a pathway for AWS to develop data centres in the Midlands powered by wind and solar energy, in line with the Government’s principles for sustainable data centre development.
For SMEs, ignorance of the law is no defence, and businesses which purchase AI solutions from any of the tech giants and deploy them in their own AI systems, will be obliged to review their terms and conditions, to ensure they comply with the AI Act.
Hardnosed negotiations will be essential including clearly allocating liability to the supplier when buying in AI systems.
With the growing use of AI in the media and creative industries, there have been a growing number of intellectual property (IP) infringement cases, where IP rights holders claim that the use of data by AI systems has infringed their IP rights.
Courts have been grappling with this issue. The Getty Images v Stability AI case in the UK and, in the US, The New York Times vs OpenAI and Microsoft are two high-profile examples.
Although both actions are currently going through the courts, the outcome will likely affect Irish and European businesses as courts come to grips with the new technology.
But the issues are complex and outcomes not certain, as is clear in the case of the comic book author seeking copyright protection in the written text and arrangement of images in the comic book ‘Zarya of the Dawn’. The US courts ruled in his favour for the text but denied such protection to the images themselves as these had been generated by an AI system.
- John Whelan is a leading expert on Irish trade