The first enforcement provisions of the EU AI Act take effect on August 2, 2026. Starting that date, companies deploying AI systems classified as "high-risk" within the EU must demonstrate compliance with transparency, data governance, and human oversight requirements.
Who is affected
Any company that deploys AI for hiring, credit scoring, law enforcement, border control, education assessment, or critical infrastructure within the EU. This includes US-based companies serving EU customers.
The readiness gap
A McKinsey survey of 500 European enterprises found that only 23% have completed AI system inventories. Just 14% have implemented the required risk assessment frameworks. Most companies underestimated the scope of the regulation.
What the fines look like
Non-compliance penalties range from 1.5% to 7% of global annual revenue, depending on the severity and the provision violated. For a company with $10 billion in revenue, the maximum fine is $700 million.