Carmen Sánchez Muñoz, Director of Regulation and Public Affairs at DigitalES

With over 17 years of experience in the technology and digital sector, part of it spent in Brussels, she has built her career within the regulatory framework of new technologies. Since 2018, she has been working at DigitalES, covering the full regulatory spectrum of digitalisation, both in cross-cutting and sector-specific matters.

Is it important to regulate the use and applications of artificial intelligence (AI)?

Without a doubt. On one hand, because AI is a rapidly evolving technology, establishing clear and effective legal frameworks helps ensure that AI is developed and used appropriately. In this sense, it is important to distinguish between the regulation of the technology itself and the regulation of its potential uses, always based on a framework that allows adaptation to new developments and is proportionate, ensuring it does not stifle innovation.

How do you assess the awareness and responsibility around the use of AI and data protection in the current context?

We are witnessing a technology that has clearly exploded onto the scene, which has many positives, but it also requires adaptation from society and companies, who sometimes are facing advancements they have not yet fully grasped or internalised. Therefore, it is important to make progress in creating genuine awareness of the positive uses, but also the risks that some AI applications may entail, through training, education, and, of course, awareness-raising.

The European Parliament recently approved the Artificial Intelligence Act. What does this milestone signify, and what are its key aspects?

On 13 March 2024, the European Parliament approved the Artificial Intelligence (AI) Act, a significant milestone in regulating this emerging technology. The law establishes a framework for the development, implementation, and use of AI in the European Union, with the aim of ensuring it is used in a safe, responsible, and ethical manner.

Some key aspects of this law include: the prohibition of certain AI practices such as mass surveillance; transparency obligations regarding how systems operate, the use of data, and decision-making by providers and users; safety and data protection requirements; oversight and enforcement through a new European Office for Artificial Intelligence; and a risk-based approach divided into four categories.

How will this law impact the entrepreneurial ecosystem? Can startups leverage regulation to boost their growth?

One of the key approaches during the drafting of the Regulation has been to continue fostering innovation. Therefore, the agreed regulation has always aimed to ensure that the innovative ecosystem, particularly small and medium-sized enterprises, plays a central role, allowing space for continued innovation.

Among the positive aspects for startups provided by the current legislative framework are: clarity and predictability (having a legal framework gives confidence to invest in this technology); access to funding (the European Commission has announced plans to invest one billion euros in AI research and innovation during the next period); and participation in the AI single market (the Regulation will help create a single market for AI in the EU, making it easier for startups to sell their products and services in other European countries).

What role has AI played in the evolution of entrepreneurship in recent years?

Taking some examples, it is undeniable that AI has contributed by automating tasks, which translates into increased productivity; facilitating the collection, analysis, and interpretation of large datasets, and therefore improving decision-making; personalising and enhancing customer experiences; developing new products and services (e.g. AI-powered virtual assistants, chatbots, medical diagnostic tools, or market prediction systems); helping with market expansion (using automatic translation, data-driven market segmentation, or personalised advertising); and providing access to capital and funding (startups that use AI innovatively can more easily attract investors, as AI is associated with higher growth potential and profitability).

In which sectors do you see AI significantly increasing the competitiveness and innovation of companies?

In recent years, several sectors have witnessed how the application of AI has increased their competitiveness. Notable examples include the healthcare sector (for disease diagnosis and treatment, drug development, and virtual healthcare assistants), the financial sector (for fraud detection, personalised financial advice, and risk management), the retail sector (for personalisation and customer service), and manufacturing (for predictive maintenance, supply chain optimisation, and industrial automation).

How do you think AI will evolve within the entrepreneurial ecosystem in the future? What challenges do we face?

Among the most immediate challenges, we must consider the potential costs that compliance with the Regulation could impose on startups, related to risk assessment, implementing security and data protection measures, and auditing their AI systems. Additionally, there is the complexity of the Regulation and the lack of experience regarding regulation and its future developments.

Moreover, some of the provisions in the Regulation, such as transparency and explainability requirements, could make it harder for startups to access the data necessary to develop and train their AI systems.

Despite these challenges, the AI Regulation also presents opportunities for startups that can effectively adapt to the new rules by developing safe, responsible, and ethical AI products and services. These companies will be well-positioned to succeed in the EU's single market.

To achieve this, it will be essential to familiarise themselves with the Regulation, conduct risk assessments, implement security and data protection measures, document AI development, implementation, and use processes, and of course, stay up to date on the Regulation's developments.