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The EU AI Act applies to US enterprises the moment their AI output reaches an EU customer, employee, or counterparty. Under Article 2(1)(c), jurisdiction follows the output, not the infrastructure. A credit scoring system hosted in Virginia that processes EU counterparties is in scope, with penalties reaching 7% of worldwide annual turnover calculated against the global parent company.
Two obligations are already enforceable. Prohibited AI practices and AI literacy requirements took effect February 2025. The full high-risk regime arrives August 2, 2026. Credit scoring, patient triage, and employment screening are explicitly high-risk. Fraud detection and algorithmic trading are not. Forty percent of enterprise AI systems fall in an ambiguous middle where Article 6(3)’s profiling override reclassifies most as high-risk.
The liability exposure goes beyond fines. The Product Liability Directive adds strict liability for non-compliant AI. Major insurers are moving to exclude AI-related coverage. All three can land simultaneously.
This article covers jurisdiction triggers, high-risk classification across banking, insurance, and healthcare, the collision of US state AI laws with the EU deadline, human oversight architecture (HITL, HOTL, HOVL), documentation-as-code, crypto-shredding for multi-framework logging, and six engineering decisions enterprises must make before August 2026.