AI Act: A Challenge That Can Become a Competitive Advantage for US Companies

The Artificial Intelligence Act (AI Act) of the European Union is a framework designed to affect not only companies established in EU Member States.

The structure of the regulation produces concrete effects for many US companies whenever an artificial intelligence system or a general-purpose AI model is placed on the European market or used in a context that generates effects within the Union.

For the American market, the AI Act constitutes a legal framework destined to influence product design, internal governance, technical documentation, contractual chains, and risk management — directly affecting the capacity to operate reliably and competitively in the European economic space.

A European Regulation with Reach Beyond Borders

One of the most significant aspects of the AI Act is its extraterritorial reach. The European Commission clarifies that the obligations applicable to providers of general-purpose AI models also apply to entities established in third countries when such models are placed on the EU market.

In operational terms, this means that a US company developing foundation models, AI-based SaaS tools, or automated systems intended for European clients cannot consider itself exempt from the regulation simply because its registered office is in the United States.

This produces a significant legal and economic effect: US companies that sell, distribute, or integrate AI technologies in services intended for European operators must verify in advance whether their systems fall within the categories governed by the regulation and what obligations follow from their specific position in the supply chain.

This is fundamentally a matter of legal classification, because the regulation distinguishes between providers, deployers, importers, distributors, and parties that substantially modify the system — assigning different duties to each.

The Main Challenges for US Companies

Three main challenges can be identified for US companies wishing to enter or already operating in the European context: risk classification, documentation and organizational requirements, and the complexity surrounding practices that the AI Act prohibits.

Starting with risk classification: the AI Act structures its framework around a graduated approach, distinguishing between prohibited practices, high-risk systems, transparency obligations, and less invasive regimes for low-risk applications.

For many US companies, this requires a review of the entire product portfolio and use cases, with a compliance logic that often differs from the one previously applied in the US regulatory context.

The second challenge is documentary and organizational: compliance does not end with the correct functioning of the system, but requires an internal structure capable of demonstrating risk management, data governance, human oversight, monitoring, traceability, and the capacity for corrective intervention.

In other words, for many US organizations the issue is not only developing an innovative system, but the need to make it verifiable and governable according to precise legal standards.

A third area of complexity concerns prohibited practices: the European Commission has clarified that the AI Act prohibits eight AI practices deemed incompatible with EU values and fundamental rights, including certain forms of harmful manipulation, exploitation of vulnerabilities, social scoring, and specific highly invasive biometric uses.

This requires US companies to carry out a preventive assessment of the features offered in Europe, potentially including the need to modify the product, restrict certain functionalities, or build a geographic segmentation of the offer.

Beyond these three challenging elements, the sanctions framework must not be overlooked: for the most serious violations, including those relating to prohibited practices, the regulation provides for fines of up to €35 million or 7% of global annual turnover, while for other non-compliances — including obligations relating to general-purpose AI models — the Commission cites thresholds of up to €15 million or 3% of global turnover.

The Question of General-Purpose Models

The issue takes on particular relevance in the case of general-purpose AI models: the European Commission has clarified that such models, when placed on the EU market, are subject to specific obligations that may include technical documentation, transparency, compliance with copyright rules, and — in cases of systemic risk — additional evaluation, mitigation, cybersecurity, and reporting measures.

This is an essential point for many US companies, given that a significant share of AI innovation coming from the United States focuses precisely on generalist models, usable across multiple sectors and integrable into downstream services.

A US provider intending to operate on a stable basis in Europe must therefore treat compliance not as a final verification, but as a component to be embedded from the outset in the design and governance of the model.

Antonino Polimeni, of Polimeni.Legal, a law firm operating in internet law, privacy, and artificial intelligence, explains:

“For US companies, the AI Act should not be read merely as a set of limitations or new bureaucratic burdens. The real novelty is that the European Union is transforming AI governance into a prerequisite for market access. This means it will no longer be sufficient to develop technologically advanced solutions: it will also be necessary to demonstrate that those solutions are classifiable, documentable, controllable, and consistent with a framework of legal accountability. From this perspective, compliance is not a brake on innovation, but a tool that allows companies to make their innovation more robust, more defensible, and more credible to clients, partners, and investors. US companies that manage to structure AI governance processes in time will be able to turn a regulatory obligation into a competitive advantage — especially in the European market and in sectors with high regulatory sensitivity.”

Polimeni captures with precision the most relevant dimension of the AI Act for the American market: the European regulation does not simply introduce constraints — it requires companies to mature their internal processes and organizational accountability, turning AI governance into a factor of market access and commercial credibility.

The Importance of Simplifying the Reading of the Regulation

One of the most common mistakes is presenting the AI Act as an indecipherable regulatory system. In reality, for US companies the regulation can be made more readable if translated into an operational path based on four steps: inventory of AI systems, qualification of the company’s role in the supply chain, risk classification, and mapping of relevant obligations to each product or model.

This approach allows compliance to be simplified without trivializing it: simplification does not consist in arbitrarily reducing requirements, but in transforming regulatory data into a clear work framework that allows management, legal teams, and technical departments to identify priorities, responsibilities, and areas of exposure.

How a Regulated Environment Can Become an Advantage

The AI Act is often perceived, especially outside Europe, as a potential brake on innovation. Yet a more careful reading shows that a regulated environment can also offer competitive advantages to those who manage to structure themselves earlier and better than competitors.

In B2B relationships, in regulated sectors, and in dealings with institutional clients, the ability to demonstrate control, traceability, accountability, and regulatory compliance already represents a distinctive marker of reliability.

For many US companies, therefore, adapting to the AI Act can become a positioning tool. A provider able to demonstrate that its AI system is correctly governed, documented, and compliant can appear more credible in vendor selection processes, in negotiations with European partners, and in contexts where regulatory risk is particularly sensitive.

In this sense, compliance is not only an initial cost, but also a reputational and commercial investment capable of strengthening the US company’s presence in the European market.

A New Relationship Between Law and Innovation

The central point, ultimately, is that the AI Act changes the way US companies must conceive the relationship between technology and regulation.

It is no longer sufficient to develop high-performing models or commercially effective solutions; it is also necessary to demonstrate that such systems are embedded in an architecture of accountability, control, and risk management consistent with European standards.

From this perspective, the American market is not simply subject to a foreign regulation, but is confronting a regulatory model set to influence global expectations regarding AI governance, product reliability, and rights protection.

Arriving prepared — with documented processes, classified systems, and an internal governance framework consistent with the standards of the regulation — is not only a way to avoid sanctions, but a tool that can help US companies build growing credibility in the European market, especially in those sectors where trust becomes a supplier selection criterion.

Author Profile

Adam Regan: Deputy Editor

Features and account management. 7 years media experience. Previously covered features for online and print editions.

Email Adam@MarkMeets.com