Search for:
Corporate Compliance

European Union: Implications of the US Executive Order on Artificial Intelligence for European Businesses

By , , , and 3 Mins Read

In brief

President Biden’s issuance of the Executive Order on Artificial Intelligence (AI) on 30 October 2023 marks a significant legislative stride in AI regulation. This directive, extending beyond the US, has profound implications for European businesses and the EU’s regulatory landscape on AI.

Contents

  1. Key Provisions of the Executive Order
  2. Impact on European Businesses
  3. EU Standards and Regulations: Responding to the US Directive
  4. Summary and Outlook

Key Provisions of the Executive Order

The Executive Order seeks to regulate and stimulate AI through a great variety of measures. Key points include:

  • Global Standards Development: A commitment to international collaboration in shaping global AI standards, fostering interoperability, and harmonizing practices.
  • Global AI Ecosystem Establishment: Recognition of AI’s interconnected development, promoting collaboration in AI research, development, and deployment between US entities and global partners.
  • Critical Infrastructure Standards: Emphasis on cooperative efforts for setting AI application standards in critical infrastructure, underscoring its global significance.
  • International Cooperation Acknowledgment: An explicit acknowledgment of the need for international collaboration in mitigating AI-related risks.
  • Red-Teaming and Risk Management: Introduction of stress-testing AI programs for safety, particularly in national security and public safety projects, indicating a commitment to rigorous evaluation and transparency.

Impact on European Businesses

  • Collaborative Opportunities: The executive order places a significant emphasis on fostering international collaboration to establish AI standards. European businesses should expect enhanced collaboration with US counterparts, particularly in AI research and development, shaping a unified AI ecosystem.
  • Labor Market Shifts: The executive order suggests a potential shift in the demand for AI-proficient personnel globally. The US government’s focus on expediting the recruitment of AI experts within its own ranks may set a precedent for similar initiatives in Europe, influencing talent acquisition strategies and human resource planning. But Europe has to act fast so as not to lose existing talent to the US.
  • Ethical AI Development Emphasis: With a strong emphasis on AI safety, security, and trust, the executive order underscores the importance of ethical AI development. European businesses involved in AI should align their practices with these principles, enhancing transparency, accountability, and user protection in their AI systems. Proactively addressing these ethical considerations is crucial in adapting to evolving regulatory expectations.

EU Standards and Regulations: Responding to the US Directive

  • Setting an International Benchmark: The US Executive Order serves as a global reference point, aligning with the EU’s emphasis on safe, transparent, and ethical AI practices. With the preliminary agreement reached on the EU AI Act on 8 December 2023, European businesses should now prepare for changing expectations and strive for high ethical standards in AI.
  • Addressing Human Rights and Discrimination: In line with the EU’s focus, the directive urges AI development to adhere to human rights principles and actively combat biases and discrimination.

Summary and Outlook

The US Executive Order on AI is a bellwether for the global AI regulatory environment, significantly impacting European businesses. As the EU continues to refine its AI standards, with the latest development on 8 December 2023, when lengthy trilogue discussions resulted in a preliminary agreement on the AI Act, European companies must stay abreast of global trends and collaborations while maintaining a strong commitment to ethical AI principles.

Baker McKenzie is closely monitoring these developments and is poised to provide tailored guidance to ensure compliance with emerging AI regulations.

Categories:
Author

Anahita Thoms heads Baker McKenzie's International Trade Practice in Germany and is a member of our EMEA Steering Committee for Compliance & Investigations. Anahita is Global Lead Sustainability Partner for our Industrials, Manufacturing and Transportation Industry Group. She serves as an Advisory Board Member in profit and non-profit organizations, such as Atlantik-Brücke, and is an elected National Committee Member at UNICEF Germany. She has served for three consecutive terms as the ABA Co-chair of the Export Controls and Economic Sanctions Committee and as the ABA Vice-Chair of the International Human Rights Committee. Anahita has also been an Advisory Board Member (Beirätin) of the Sustainable Finance Advisory Council of the German Government.

Anahita has won various accolades for her work, including 100 Most Influential Women in German Business (manager magazin), Top Lawyer (Wirtschaftswoche), Winner of the Strive Awards in the category Sustainability, Pioneer in the area of sustainability (Juve), International Trade Lawyer of the Year (Germany) 2020 ILO Client Choice Awards, Young Global Leader of the World Economic Forum, Capital 40 under 40, International Trade Lawyer of the Year (New York) 2016 ILO Client Choice Awards. In 2023, Handelsblatt recognized her as one of Germany’s Dealmaker and “most sought after advisors of the country” in the field of sustainability.

Author

Eva-Maria Strobel is a partner in Baker McKenzie's Zurich office. She is a member in the Firm's global IPTech Practice Group, chairs the EMEA IPTech Practice Group and heads the Swiss IPTech team. Eva-Maria is admitted to the bars in Switzerland and Germany, and worked in the Firm's Frankfurt office prior to relocating to Zurich. Legal 500, Chambers, WIPR, Managing IP and WTR 1000 praise Eva-Maria as one of the leading trademark lawyers in Switzerland.

Author

Florian Tannen is a partner in the Munich office of Baker McKenzie with more than 10 years of experience. He advises on all areas of contentious and non-contentious information technology law, including internet, computer/software and in particular data privacy law. Before joining the Firm, Florian worked for two major law firms and a large US-based technology company.

Author

Kimberley Fischer is a member of the International Trade Practice in Baker McKenzie's Berlin office. She joined the Firm in 2022. Kimberley studied law at the Ruprecht Karls University of Heidelberg and the Universidad de Deusto (Spain), with a focus on public international law and human rights. Prior to joining the Firm, Kimberley completed her legal traineeship at the Higher Regional Court of Frankfurt am Main, the German Federal Foreign Office in Berlin and at an international law firm in Brussels and Frankfurt am Main. She also gained significant experience in public (international) law as a research assistant at the University of Heidelberg and at a reputable law firm.

Author

Dr. Alexander Ehrle is a member of the Firm's International Trade Practice in Baker McKenzie's Berlin office. Alexander studied law at the Universities of Heidelberg, Montpellier (France), Mainz, Munich and New York (NYU) specializing in Public International and European Law. He worked as advisor and member of a delegation of a developing country at the United Nations before qualifying for the German bar. He spent his clerkship with the Higher Regional Court in Berlin, the German Ministry of Foreign Affairs in Berlin and Tokyo as well as an international law firm in Frankfurt and Milan. He wrote his doctoral dissertation on the structural changes of public international law and their conceptualization in academic discourse basing his research on the governance of areas beyond national jurisdiction. Alexander is admitted to practice in Germany and New York. 

Alexander co-chairs the Business & Human Rights Committee of the American Bar Association’s International Law Section and has been recognized as one of 40 under 40 lawyers worldwide for foreign investment control by the Global Competition Review.

Related Posts