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Walking the Tightrope: As Generative AI Meets EU Regulation, Pragmatism Is Likely

 |  January 26, 2024

By: Paul Lee, Lucia Lucchini & Michelle Seng Ah Lee (Deloitte Insights)

The significance of well-crafted regulations cannot be overstated in unleashing the potential of any market. In the realm of generative AI, the absence of clear regulatory frameworks may lead to hesitancy among vendors, enterprise customers, and end users. However, the European Union (EU) is poised to establish global standards for regulating generative AI in 2024, not only shaping its own markets but also serving as a model for other regions.

In 2024, two EU regulations are anticipated to influence the growth of the generative AI market within the region and beyond. These are the General Data Protection Regulation (GDPR), which has been in effect since 2018, and the forthcoming EU AI Act (AIA), expected to be ratified in early 2024. As generative AI sparks discussions on managing issues like individual consent, rectification, erasure, bias mitigation, and copyright usage, the industry’s trajectory will be influenced by how organizations and regulators perceive, enforce, and address areas of contention.

Despite potential challenges, collaborative efforts through open and transparent dialogues between industry players and regulators are likely to yield a pragmatic approach that balances regulatory compliance with fostering innovation in generative AI. This follows the trend of discussions held in 2023, which saw interventions by regulators in the EU and other markets. Vendors have adjusted their strategies to meet regulatory requirements, while regulators have facilitated innovation. By addressing the concerns raised by EU regulations in 2024 and highlighting the benefits of core technologies, the generative AI market is expected to continue evolving productively…