As I sit here, sipping my coffee and reflecting on the past few days, I am reminded of the monumental shift that has taken place in the world of artificial intelligence. On February 2, 2025, the European Union's Artificial Intelligence Act, or the EU AI Act, began its phased implementation, marking a new era in AI regulation.

The Act, which entered into force on August 1, 2024, aims to promote the safe and trustworthy development and deployment of AI in the EU. It introduces a risk-based approach, categorizing AI systems into four risk levels: minimal, limited, high, and unacceptable. The first phase of implementation, which kicked in just a few days ago, prohibits AI systems that pose unacceptable risks, including those that manipulate or exploit individuals, perform social scoring, and infer individuals' emotions in workplaces or educational institutions.

I think back to the words of Cédric Burton, a data, privacy, and cybersecurity expert at Wilson Sonsini, who emphasized the importance of AI literacy among staff. As of February 2, 2025, organizations operating in the European market must ensure that their employees involved in the use and deployment of AI systems have a sufficient level of knowledge and understanding about AI, including its opportunities and risks.

The EU AI Act is not just about prohibition; it's also about governance. The Act requires each EU country to identify competent regulators to enforce it, with some countries, like Spain, taking a centralized approach by establishing a new dedicated AI agency. The European Commission is also working with the industry to develop a Code of Practice for providers of general-purpose AI models, which will be subject to centralized enforcement.

As I ponder the implications of the EU AI Act, I am reminded of the complex web of national enforcement regimes combined with EU-level enforcement. Companies will need to assess a myriad of local laws to understand their exposure to national regulators and risks of sanctions. The Act provides three thresholds for EU countries to consider, depending on the nature of the violation, with fines ranging from EUR 7.5 million to EUR 35 million or up to seven percent of worldwide annual turnover.

The EU AI Act is a game-changer, and its impact will be felt far beyond the EU's borders. As the world grapples with the challenges and opportunities of AI, the EU is leading the way in shaping a regulatory framework that prioritizes safety, transparency, and human control. As I finish my coffee, I am left with a sense of excitement and trepidation, wondering what the future holds for AI and its role in shaping our world.