Responsible AI

Authors: Jesper Nevalainen

For a while now, news feeds have been flooded with posts, articles, and blogs about the EU AI Act, which entered into force on 1 August 2024 and will gradually start applying from September 2025. The AI Act is a first-mover regulation by the EU regulating the use of AI systems, including generative AI and large language models, such as ChatGTP. Whilst regulatory compliance is important in itself, and as the Act is directly applicable to all parties in scope (providers, distributors, importers, and users of AI systems) without the need for any Member State to implement the acts and with potential severe consequences for non-compliance, responsible AI should also be seen as good business, the right thing to do, and something professional investors will also look for and expect.

By way of an example, the Government Pension Fund of Norway (commonly referred to as the Oil Fund) and the ICGN — International Corporate Governance Network (led by investors responsible for assets under management of around USD 77 trillion) have both a while ago published their respective views on Responsible AI, which have perhaps not been featured in said news feeds and discussion as much as the AI Act itself.

The Government Pension Fund of Norway lists the following as the key elements of Responsible AI: (i) board accountability, (ii) transparency and explainability, and (iii) risk management, whereas the ICGN lists the following as investors’ expectations of companies on Responsible AI: (i) board oversight, (ii) responsible AI practices, (iii) risk management, (iv) transparency and explainability, and (v) regulatory compliance.

Consequently, compliance with the AI Act and Responsible AI is not just compliance towards the supervising authority but something much broader that will be a key focus for investors going forward. As the transition period for the application of the AI Act has already started, the time to act is now.

You can read the Government Pension Fund of Norway’s publication on Responsible artificial intelligence here and the ICGN Investor Viewpoint – Artificial intelligence: An engagement guide here.