EU AI Act Fines Explained With Real Numbers

Penalties, Examples & What You Need to Know About the EU AI Act fines

The European Union Artificial Intelligence Act (EU AI Act) represents a major regulatory milestone — the world’s first comprehensive framework governing the development, deployment, and use of AI systems. Like the GDPR before it, the AI Act doesn’t just set rules for ethical and safe AI; it backs those rules with significant financial penalties for non‑compliance. This article breaks down exactly how fines under the EU AI Act work, provides real figures and examples, and explains what organisations — both inside and outside the EU — must do to avoid costly enforcement actions.

Understanding the Purpose of Fines

The AI Act’s penalty structure is designed to be effective, proportionate, and dissuasive — meaning fines are calibrated to actually deter misconduct, rather than function as a mere cost of doing business. Enforcement is tiered by the severity of the infringement, and (like other EU tech regulations) follows a risk‑based approach.

EU AI Act Penalty Tiers — Breakdown With Real Numbers

Below is a detailed table summarising the main fine tiers under the AI Act and how they are applied:

Violation Category	Maximum Fine	Percentage of Global Revenue	Application
Unacceptable AI practices	€35,000,000	7%	Banned AI behaviour (e.g., social scoring, manipulative systems)
High‑risk/major compliance breaches	€15,000,000	3%	Failure to meet risk, governance, or documentation requirements
General‑Purpose AI providers violations	€15,000,000	3%	Providers failing to produce documents, respond to requests, or cooperate
Incorrect/misleading information	€7,500,000	1%	Misleading authorities or supplying incomplete data

Key Points About These Figures

• Higher of Two Figures: In most cases, regulators can decide to fine either the fixed amount (e.g., €35 million) or a percentage of worldwide turnover — whichever is higher. This is the same enforcement strategy used under the GDPR.
• Global Reach: The AI Act has extraterritorial reach, meaning companies outside the EU that offer AI products/services to EU citizens can be subject to fines.
• Effective Dates: While the Act entered into force in 2024, major enforcement provisions (especially against general‑purpose AI models) kick in starting August 2, 2026.

Tier 1: Banned or Unacceptable AI Practices — The Heaviest Penalty

The most severe fines — up to €35 million or 7% of global turnover — apply when an organisation engages in practices the Act explicitly bans. These include dangerous or manipulative AI use cases that could fundamentally harm individuals or society.

Example

If a tech firm deploys an AI system that profiles users for “social scoring” or uses manipulative algorithms that exploit vulnerabilities (such as targeting children or vulnerable adults), the regulator may levy this top tier fine. Since many companies generate billions in revenue, the 7% threshold can far exceed €35 million.

Tier 2: High‑Risk Non‑Compliance — Obligations Violated

Companies that fail to comply with key obligations — such as risk management, data governance, transparency, documentation, or post‑market monitoring — face fines up to €15 million or 3% of their global turnover.

This tier captures the bulk of compliance violations that don’t rise to the level of banned practices but still pose serious risks if left unaddressed.

Example:
A company deploying a high‑risk AI system (e.g., in healthcare diagnostics) that fails to maintain required documentation or risk assessment logs could be subject to this level of penalty.

Tier 3: Procedural Violations — Misleading Information

Providing incorrect, incomplete, or misleading information to regulatory bodies, certified bodies, or authorities can trigger fines up to €7.5 million or 1% of global turnover. AI Act

This level is particularly relevant where organisations attempt to bypass compliance by obfuscating key data during audits or investigations.

Special Category: General‑Purpose AI (e.g., Foundation Models)

Under Article 101, providers of general‑purpose AI models (large models capable of broad tasks such as language understanding, image generation, etc.) who fail to comply with transparency, cooperation, or documentation requests can be fined up to €15 million or 3% of worldwide turnover.

This provision recognises the systemic impact of foundation models and provides regulators with a tool to enforce transparency and accountability across powerful AI systems.

Real‑World Enforcement Examples (Contextual)

Although the AI Act fines are not yet widely imposed (enforcement is still ramping up), we can contextualise the potential impact by looking at AI‑relevant fines under other EU digital laws:

• X (formerly Twitter) was recently fined €120 million under the Digital Services Act (DSA) for transparency violations (not AI Acts, but similar regulatory logic). This demonstrates Europe’s willingness to enforce hefty fines against major tech players.

Imagine if such fines were instead levied under the AI Act — for example, multiple breaches across different systems or failure to implement risk controls across essential AI systems — and the penalties could easily scale into the hundreds of millions or billions for global tech firms.

Why These Fines Matter — Risk, Trust & Competitive Edge

1. Incentivising Compliance

Heavy fines create a compelling incentive to invest in strong governance, audits, documentation, and risk mitigation — exactly what the EU AI Act seeks to achieve.

2. Global Implications

Because of extraterritorial reach, non‑EU companies (e.g., US or Asian developers) must comply if their AI impacts EU users. This drives global standards and influences international AI governance.

3. Reputation at Stake

Beyond monetary costs, non‑compliance risks reputational damage, loss of customer trust, and market exclusion — factors that often outweigh the fines themselves.

Step‑by‑Step Compliance Checklist

To avoid penalties, organisations should adopt a structured compliance strategy:

1. Classify Your AI Systems: Identify if systems fall under prohibited, high, limited, or minimal risk categories.
2. Document Everything: Maintain logs, risk assessments, transparency reports, and monitoring records.
3. Engage in Third‑Party Audits: Independent assessments can reveal gaps before regulators do.
4. Train Staff on AI Governance: Non‑technical teams should be familiar with regulatory requirements.
5. Prepare for Audits & Requests: Be ready to respond promptly with accurate data if regulators ask.

FAQs — EU AI Act Fines

Q: When do the EU AI Act fines take effect?
A: The regulation entered into force in 2024, but major enforcement actions — especially for general‑purpose models — begin in August 2026. Artificial Intelligence Act

Q: Do all AI systems face the same fine structure?
A: No — fines depend on risk level and type of violation, with banned practices incurring the highest penalties.

Q: Could fines exceed €35 million?
A: Yes. If a company’s 7% of global revenue exceeds €35 million, regulators will use the percentage instead.

Q: Does this affect companies outside the EU?
A: Yes — any company offering AI services to EU users is within scope.

Conclusion

The EU AI Act’s fines reflect the seriousness with which regulators view AI’s societal and economic impact. With tiered penalties, global reach, and high‑stakes enforcement, organisations must prioritise compliance as part of their AI strategy — not an afterthought.

Failure to do so could mean tens of millions, or even billions of euros in fines, reputational damage, and operational disruption. By understanding the fine structures outlined above and preparing proactively, companies can turn compliance into a competitive advantage in a world where responsible AI is increasingly the norm.