The EU AI Act, the world's first comprehensive AI regulation, is set to impact financial markets with risk classifications for AI systems: Unacceptable (banned), High (restricted), Limited/Transparency (requires user awareness), and Minimal (no additional requirements). It applies to all EU member states and externally to entities impacting the EU market. Investors see challenges for tech firms, particularly smaller ones, but potential growth for those specializing in compliance and trustworthy AI. Compliance costs are high, penalties for non-compliance severe. The Act officially enforcement starts August 2024, with parts rolling out earlier.
