In a pioneering move, the European Union has taken a decisive step towards regulating the rapidly evolving field of artificial intelligence (AI). European Union lawmakers granted final approval to a landmark law governing AI on Wednesday, positioning the EU as a frontrunner in the regulation of this critical yet worrying technology, outpacing the United States once again.

This first-of-its-kind law is poised to reshape how businesses and organizations within the EU utilize AI across various domains, ranging from healthcare decisions to law enforcement. The legislation imposes blanket bans on certain "unacceptable" uses of AI while enacting stringent guardrails for other applications deemed "high-risk."

Notably, the EU AI Act outlaws social scoring systems powered by AI and any biometric-based tools used to infer an individual's race, political leanings, or sexual orientation. It also prohibits the use of AI to interpret emotions in educational and workplace settings, as well as certain types of automated profiling intended to predict an individual's likelihood of committing future crimes.

Meanwhile, the law delineates a separate category of "high-risk" AI applications, particularly in areas such as education, hiring, and access to government services. This category is subject to a distinct set of transparency and other obligations.

Companies like OpenAI, which produce powerful, complex, and widely used AI models, will also be subject to new disclosure requirements under this legislation. Additionally, the law mandates that all AI-generated deepfakes be clearly labeled, addressing concerns about manipulated media's potential to fuel disinformation and election meddling.

The comprehensive legislation, set to take effect in approximately two years, underscores the swift response of EU policymakers to the exploding popularity of tools such as OpenAI's ChatGPT. The legislation approved by a plenary vote in the European Parliament this week is the culmination of a proposal initially introduced in 2021, granting lawmakers a head start when the release of ChatGPT sparked an investment boom and public frenzy.

This final product stands in stark contrast to the United States, which has yet to make any meaningful progress on federal legislation for AI, despite Senate Majority Leader Chuck Schumer's rare and personal effort last year to prioritize the issue on the agenda.