EU Draft AI Regulation and its Potential Impact on the Venture Capital Sector
In April 2021, the European Commission (EC) published a legal framework proposal on AI, a first of its kind. Regulating AI has been an emerging global legal challenge. Taking advantage of first-mover advantage, the EU aims to sustain its leading role in setting international standards, inspiring other regulatory initiatives worldwide, and disseminating European values. We did observe a similar phenomenon (the Brussels Effect) when GDPR (General Data Protection Regulation) became almost an international standard in a relatively short period. The EU aims to align technological advancements with fundamental human rights.
The regulation, however, will have a significant impact on AI companies and their investors. ACT partner Okan Kara analyzes the potential effects of this regulation on VC operations.