EU AI Act Underrepresented and Insufficient to Address the Risk and Vulnerabilities of Generative AI

Sridhar Jonnala, Pramod Kumar Parida and Nisha Mary Thomas
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Sridhar Jonnala: IBM India Pvt. Ltd., India
Pramod Kumar Parida: IBM India Pvt. Ltd., India
Nisha Mary Thomas: International School of Management Excellence-Bangalore, Karnataka, India

International Journal of Business Analytics (IJBAN), 2025, vol. 12, issue 1, 1-27

Abstract: This study conducts a systematic evaluation of the European Union Artificial Intelligence Act, assessing its regulatory alignment with the rapidly evolving risk landscape posed by Generative AI systems. Employing large language models within a governance-oriented analytical framework, the analysis critically examines the extent to which the Act addresses foundational concerns such as algorithmic fairness, model explainability, environmental sustainability, and financial stability. While the Act advances transparency and accountability, analysis reveals notable limitations in operational guidance and alignment with high-level ethical principles. Overall, the Act represents a positive foundation, yet targeted enhancements are essential for enabling responsible innovation and ensuring that Generative AI advances align with societal and economic values. The proposed framework also enables practical self-audits and supports future regulatory design, making it a valuable tool for both public and private stakeholders.

Date: 2025
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