EU AI Act: Why is it needed and how it supports SME’s

11.03.2025

You are probably aware of the EU AI Act and of the first regulations that came into force on February 2, 2025. Nevertheless, I felt it might be a good idea to write a few words about it. I am by no means a lover of legal texts nor an expert in EU regulations, but since I work in AI, I feel I must know the basics of this new regulation and continue to learn as the regulation enters into force gradually over the next couple of years. This will not only ensure that in Ai4Value we ourselves comply to the regulation, but will enable us, as AI professionals, to help our customers comply to the regulation. The EU AI Act is not a piece of cake to digest with its 144 pages, 13 chapters and 13 annexes. I’ve even heard legal experts say just last week that every time they review the regulation, they notice something new. 

My top 3 to get started with EU AI Act 

On my opinion most important things to capture from the regulation now are the following: 

1. Why the regulation is in place?
2. What is obligatory as of Feb 2?
3. How to prepare for the requirements entering into force next (Aug 25)?  

There will be a series of blog posts to cover these 3 aspects, and in this text I will focus on the first question. 

Naturally it is also important to understand who are in scope of this regulation, but that part seemed relatively straightforward, at least for an AI system provider within the EU. Also, it is good to understand that the regulation is technology-neutral and that many of the obligations are risk-based. You can find a brief introduction to the risk levels in this summary article by the European Parliament.

Why is the regulation in place? What say you EU? 

The following statements are a bit heavy to read as they come directly from the regulation text, but let’s take it as it is served in Recital 1 of the Act. The purpose of this regulation is to: 

• improve the functioning of the internal market by laying down a uniform legal framework in particular for the development, the placing on the market, the putting into service and the use of artificial intelligence systems (AI systems) in the Union, in accordance with Union values,
• promote the uptake of human centric and trustworthy artificial intelligence (AI) while ensuring a high level of protection of health, safety, fundamental rights as enshrined in the Charter of Fundamental Rights of the European Union, including democracy, the rule of law and environmental protection,
• protect against the harmful effects of AI systems in the Union, and
• support innovation.

All good and valid purposes on my opinion. I was particularly intrigued by the last one since our goal at Ai4Value is to help our customers’ innovation and since we at Ai4Value are a small company ourselves.  

Support to innovation in the form of a regulatory sandbox 

Based on the regulation text the support to innovation revolves primarily around the fact that member states are to ensure that their authorities establish at least one AI regulatory sandbox at national level, which shall be operational by 2 August 2026.  

What is a regulatory sandbox? The term means a controlled framework set up by an authority which offers providers of AI systems the possibility to develop, train, validate and test, where appropriate in real-world conditions, an innovative AI system, pursuant to a sandbox plan for a limited time under regulatory supervision. Sounds quite complex… and at least for the moment it is not clear to me what is the authority that will offer this service, or how exactly it will work in practice. 

Simplified quality management and many more 

Another support to innovation stated in the regulation is that microenterprises (within the meaning of Recommendation 2003/361/EC) may comply in a simplified manner with some of the elements of the quality management system required by the AI Act (for high-risk AI systems), but these are not yet described, at least to my understanding, in more detail in the regulation text. There are also several other support measures described in the regulation (article 62), for example, organisation of specific training activities on the application of the regulation and facilitation of SMEs participation in standardisation development process. Surely all these mean well but it was a little hard for me to see the concrete support in them (may of course be due to my inability to completely digest the regulation text). It feels there are going to be quite a lot of limitations related to the relaxation to microenterprises. I did find this guide to the act specially designed towards SME’s: Small Businesses’ Guide to the AI Act | EU Artificial Intelligence Act, hopefully this is helpful if you are looking for more answers.

Final thoughts 

All in all, I must admit I feel slightly skeptical about how exactly and to what extent the actions mentioned will support innovation. Regulatory sandbox will surely be helpful to ensure your solution meets the requirements, but not 100% sure if that is support to innovation or just support to market entry. A lot of the concrete details of how all this is going to be put into practice are probably also still in the making.  

But regulation is now in place, go explore it, get to know it piece by piece, and join me soon for another post regarding the obligations already in place! 

Here are a few more links I thought might be useful for you: 

• EU AI Office: European AI Office | Shaping Europe’s digital future
• Summary by the commission: EU AI Act: first regulation on artificial intelligence 
• + once more the regulation text: L_202401689EN.000101.fmx.xml 

• #EU AI Act