AI in PFM

The EU Artificial Intelligence Act introduces a risk-based framework for regulating AI, with requirements becoming stricter as the potential impact of an AI system increases. It prohibits certain unacceptable-risk applications, such as harmful social scoring and manipulative AI, while imposing detailed requirements on high-risk systems used in areas such as public services, employment, critical infrastructure, law enforcement and justice. These requirements include strong data governance, risk management, documentation, human oversight, accuracy, cybersecurity and auditability. The Act also establishes transparency requirements for some lower-risk applications and specific obligations for general-purpose AI models, particularly those posing systemic risks. Overall, the framework seeks to encourage AI innovation while ensuring that its use remains safe, transparent, accountable and consistent with fundamental rights.