AI System

Article 3(1) of the EU AI Act defines an 'AI system' as follows:

"a machine-based system that is designed to operate with varying levels of autonomy and that may exhibit adaptiveness after deployment, and that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments".

The EU AI Act uses a technology neutral definition, focusing on the effect of the system rather than the techniques used. There are several key features of the definition which, acting together, distinguish the AI system from more traditional software systems. The central characteristics are the level of autonomy and adaptiveness in how the system operates and the ability for the system to infer how to generate outputs. So, an AI system must be able to operate independently at some level (like many existing technologies) but must also be able to apply logic to draw conclusions from data it is given. It may also adapt after deployment, in effect by continuing to "learn". These features are more akin to human capability than traditional technology systems, which operate using more fixed and pre-determined paths to process data. These outputs must influence physical or virtual environments, whether by making decisions or through other means.

The EU AI Act also sets out specific rules for GPAI models. GPAI models differ from AI systems; they can be an essential component integrated into an AI system, but do not themselves constitute an AI system until further components are added (such as an interface).  For more information, please see Controls on generative AI.

Provider

Article 3(3) of the EU AI Act defines a 'provider' as follows:

"a natural or legal person, public authority, agency or other body that develops an AI system or a general-purpose AI model or that has an AI system, or a general-purpose AI model developed and places it on the market or puts the AI system into service under its own name or trademark, whether for payment or free of charge".

Those falling within this definition as a ‘provider’ have significant responsibility for ensuring compliance with the EU AI Act, and so identifying the provider will be crucial for businesses and may well influence their choice of business/deployment model.

The provider is responsible for putting the AI on the market either by making it first available in the market or directly puts the AI into use for its own purposes and under its own name or trademark. An organisation may also become a downstream provider if it makes substantial modifications to a system or changes its intended purpose (Article 25(1)). Guidance from the European Commission is expected on what counts as a “substantial modification”. At this stage, the only conclusive criteria is that such modification must not have been foreseen by the provider in the initial conformity assessment carried out by the provider.

Payment is not relevant, which will impact GPAI models supplied onto the market on an open source or under free commercial terms.

Deployer

Article 3(4) of the EU AI Act defines a 'deployer' as follows:

"a natural or legal person, public authority, agency or other body using an AI system under its authority except where the AI system is used in the course of a personal non-professional activity".

In simple terms, a 'deployer' is an entity that uses an AI system other than for personal, non-professional use. Although the burden of responsibility on a deployer is not as great as on 'providers', there are still obligations that it must fulfil.

Note that the EU AI Act also implements requirements for organisations performing other roles (as distributor, importer, product manufacturer, and authorised representative). Together with the deployer and provider, such organisations are referred to as 'operators' of AI. Importantly, the same operator may qualify simultaneously as more than one of these roles if they meet the respective conditions. For instance, it is possible to be both the provider and the deployer of an AI system at the same time.