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Everyone knows the headline number. Almost nobody plans for the other two. That gap tells you exactly how most organisations are preparing, and why so many will still be caught. The three tiers Prohibited practices cost up to 35 million euros or 7% of worldwide annual turnover, whichever is higher. Breaching operator or general-purpose model duties runs to 15 million euros or 3%. Giving an authority incorrect, incomplete or misleading information costs up to 7.5 million euros or 1%. Small and medium companies are capped at the lower of the two figures rather than the higher. Read the third tier twice. It does not punish reckless AI. It punishes an inaccurate answer. You can act in good faith, answer a regulator from a spreadsheet nobody updated, and land inside it. Which is the cheapest tier to avoid, and the only one that is purely an admin problem. Why that tier is a governance failure, not a legal one AI compliance means proving your AI meets rules somebody els...

  Artificial intelligence is now regulated law in Europe, and many businesses are further behind than they realise. The EU AI Act entered into force on 1 August 2024 as the first legal framework built entirely around AI. Its rules arrive in stages, and some of the most important ones already apply. The four risk categories The Act sorts every AI system into one of four tiers, and your obligations depend on where your systems land. Unacceptable risk systems are banned outright. Since 2 February 2025, the EU prohibits AI that manipulates people into harm, exploits vulnerable groups, runs social scoring for public authorities, scrapes facial images from the internet, or reads emotions in workplaces and schools. High-risk systems are allowed, with strict conditions. This tier covers AI used in hiring, credit scoring, education, critical infrastructure, law enforcement and border control. Providers must complete conformity assessments, keep detailed technical documentation, register...

  Artificial intelligence now sits inside hiring tools, credit checks, chatbots and marketing platforms. Yet many organisations use these systems without any structure for managing the risks they create. That structure has a name: AI governance. What AI governance means AI governance is the set of internal policies, roles and checks that guide how an organisation builds, buys and monitors AI. It covers the full life of a system, from the data used to train it through to how its outputs are reviewed once it is live. The central idea is accountability. Someone must be able to answer for what each system does. It is worth separating governance from regulation. Regulation is imposed from outside by law. Governance is what an organisation builds internally, and good governance usually goes further than the legal minimum. The rules that now apply The most important law in this area is the EU AI Act. According to the official implementation timeline published at artificialintelligenc...