Artificial Intelligence (AI) has become integral to modern business operations, driving innovation and efficiency across various sectors. However, with its rapid adoption, the importance of compliance with emerging AI regulations cannot be overstated. Failure to adhere to these regulations poses significant financial risks, with potential fines reaching or exceeding $100 million.
The European Union’s AI Act exemplifies the stringent measures being implemented to regulate AI. Under this Act, violations can result in fines of up to €35 million or 7% of a company’s global annual turnover, whichever is higher. This surpasses the penalties under the General Data Protection Regulation (GDPR), highlighting the EU’s commitment to enforcing compliance in AI practices.
Case Study: Lingo Telecom's Deepfake Robocall Incident
In August 2024, Lingo Telecom faced significant penalties due to non-compliance with AI regulations. The company agreed to pay a $1 million fine to settle an enforcement action by the Federal Communications Commission (FCC) after transmitting a deepfake robocall using President Joe Biden’s voice. The call, which targeted New Hampshire voters in January and discouraged participation in the Democratic primary, was traced to political consultant Steve Kramer, who faced a separate $6 million fine. This incident underscores the substantial financial risks associated with unethical use of AI deployment. theverge.com
Future-Proofing AI
As regulations become more stringent, businesses must proactively adapt to ensure their AI systems are compliant. Future-proofing AI involves: theverge.com
Embedding Compliance into AI Development: Integrate regulatory considerations at every stage of AI system development and deployment. A compliance-first approach ensures that AI technologies meet current and forthcoming legal standards.
Implementing Robust Data Governance: Establish clear policies for data collection, storage and processing to maintain data quality and integrity. This is crucial for the development of reliable and compliant AI systems.
Ensuring Transparency and Accountability: Develop AI models that are interpretable and maintain comprehensive documentation of AI operations. Transparency fosters trust and facilitates compliance with regulatory requirements.
Conducting Regular Compliance Audits: Perform ongoing assessments of AI systems to identify and mitigate potential compliance issues. Regular audits help in adapting to evolving regulations and maintaining adherence to legal standards.
Our Commitment to Navigating AI Compliance
Recognising the complexities of the regulatory landscape, we are dedicated to developing solutions that assist businesses in navigating AI compliance effectively. Our aim at North Atlantic is to provide tools and strategies that not only ensure adherence to current regulations but also anticipate future compliance requirements, thereby safeguarding businesses from substantial financial penalties.
Looking Ahead: The Evolution of AI Compliance
The next five years are likely to witness significant changes in AI compliance, with regulations becoming more comprehensive and enforcement mechanisms more robust. Businesses that proactively adapt to these changes by integrating compliance into their AI strategies will be better positioned to thrive in this evolving landscape.
How do you think AI compliance will change in the next five years?
North Atlantic
Victor A. Lausas
