The EU AI Act, finalized in December 2023, introduces a risk-based framework for AI regulation: 

• Banned: Systems posing an unacceptable risk (e.g., social scoring, real-time biometric surveillance). 

• High-risk: AI in sensitive domains (e.g., employment, justice, healthcare) must meet strict oversight, data, and transparency standards. 

• Limited-risk: Systems must inform users when interacting with AI or when content is AI-generated. 

• Minimal-risk: Most consumer uses require no specific action, though best practices are encouraged. 

Impact: This law applies extraterritorially, affecting any company offering AI products or services within the EU.