The application of the AI Act, the European Union’s comprehensive legislation on artificial intelligence , is now underway. Although the regulation formally came into force in August 2024, the first set of prohibitions only became effective on Sunday, 2 February 2025. Around 60 additional implementing measures are still required to fully operationalise the framework established by Regulation (EU) 2024/1689.
The AI Act aims to establish clear responsibilities for AI system users while fostering the safe and ethical development of artificial intelligence. Its overarching goal is to safeguard public safety and fundamental rights, including those of individuals interacting with AI systems beyond the EU’s borders.
The legislation outlines key provisions related to transparency, safety, data protection, human oversight, and accuracy, all designed to build trust and support innovation in the AI sector. It classifies AI systems into different risk categories and imposes stricter requirements for those deemed high-risk. One of the main challenges for businesses is ensuring compliance: failure to do so may lead to fines of up to 7% of global turnover, civil liability, and reputational damage.
Many companies are adopting increasingly tailored approaches to customer service, leveraging advanced AI models, including Machine Learning, Deep Learning and Natural Language Processing, to deliver fast, personalised solutions and enhance user experience.
However, some of the Act’s provisions are viewed as overly complex or ambiguous, potentially complicating interpretation and implementation. Moreover, the regulatory burden may slow innovation, particularly for small and medium-sized enterprises (SMEs), which often struggle to allocate sufficient resources to compliance.
Upcoming deadlines and SME challenges
Following the initial provisions that came into force in February 2025, the AI Act includes a phased timeline of upcoming obligations, with full compliance for high-risk AI systems expected throughout 2026. It is crucial for organisations to begin assessing their internal processes and systems now, to avoid costly delays or compliance gaps later.
For small and medium-sized enterprises (SMEs), navigating these new requirements can be especially challenging due to limited resources or technical expertise. However, practical strategies do exist, from using automated tools to monitor and manage AI risk, to forming partnerships with compliant vendors or legal-tech specialists. In this evolving landscape, adopting technologies like smart legal contracts can help SMEs simplify compliance and enhance transparency, turning regulation into an opportunity rather than a hurdle.
What Lies Ahead for Businesses Under the AI Act?
In addition to addressing concerns around data privacy and intellectual property, the AI Act is designed to ensure that AI applications operate transparently and that clear accountability exists in the event of system errors or harm.
Integrating blockchain technology with AI systems can support these goals by providing enhanced transparency, security, and data immutability. Blockchain offers innovative solutions to trust, traceability, and efficiency challenges, particularly in sectors such as legal, sales, logistics, supply chain, IT, and human resources.
Businesses will have two years to achieve full compliance with the AI Act. The path to conformity will depend on the type of AI systems in use and their associated risk levels. In this context, smart contracts and blockchain technology offer a valuable opportunity for integrated compliance. Smart contracts enhance the efficiency and security of contractual obligations.
Trakti’s decentralised peer-to-peer platform, built on blockchain, streamlines contract workflows and automates the activation of smart contracts. From digital signatures and KYC/AML checks to payments and contractual obligation management, everything is handled within a single certified and auditable system.
With Trakti, you can drive your company’s digital transformation, reduce risk, and increase process efficiency.
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