Forecasting the Impact of the EU's Proposed AI Regulation: Why Regulation Won't Kill AI Innovation in the EU

Description

This IDC Market Perspective presents our forecast of the potential impact of the EU's proposed AI regulations on the AI software market. In April 2021, the European Commission submitted a detailed proposal of its plans to regulate the artificial intelligence market in Europe. "The proposed EU AI Act, although set to change the environment for developing and selling AI technologies, will not lead to a dramatic decline in AI software markets' trajectory as some have claimed. Only a limited proportion of AI use cases in terms of market size will be covered by the legislation, while most AI market application areas will remain relatively unconstrained to operate as normal. The legislation will help to put greater focus on trustworthy or ethical AI, something vendors should actively respond to in their marketing and product strategies," said Jack Vernon, senior research analyst covering the European AI market at IDC.

Product Code: EUR149102722

Executive Snapshot

New Market Developments and Dynamics

Introduction
The EU AI Act: Background
Forecasting the Impact of the Proposal: Three Scenarios for the AI Software Market
- Defining the Scale of Impact
- EU AI Act Forecast Scenarios
Market Forecast Outcomes
Impact on Industry Verticals - Balanced Scenario View
Impact on AI Software Technologies Across All Scenarios
- Possible Risk: AI CRM Applications and AI ERM Applications - Embedded AI Features Could be Seen Unfavorably in Light of the Legislation
- No Impact: Rest of AI Applications, Intelligent Knowledge Discovery, AI Application Development and Deployment, AI Infrastructure Software - Limited Exposures to Regulated Use Cases
- Possible Opportunity: AI Software Services, AI Life-Cycle Software - Drive Toward Explainability and Pre-Certified AI Tools Encouraged by the Legislation could Open Up Opportunities for Products in these Categories
Impact on AI Use Cases
Understanding the Variables in the Forecast
- Factors Considered in Forecast Scenarios
- Factors that Are Not Considered in the Forecast