And the Fines you have to pay here?
It’s the Reputational damage & of course, Regulatory backlash.
AI adoption is up. So are compliance risks.
In the rush to automate and scale, most companies are overlooking one thing—regulatory frameworks are evolving faster than internal policies can keep up.
Take this for instance now –
A global firm was fined millions because their AI model processed personal data without explicit consent. The other notable examples are, OpenAI’s ChatGPT €15 million Fine in Italy, Clearview AI’s Penalties over £7.5 million, in Europe & not to forget a recent one – Apple’s Siri Privacy Lawsuit $95 million Settlement!
Not because their tech was broken.
Because their compliance playbook was.
But What’s Going Wrong here?
Data Privacy:
Since, AI models need large amounts of data to learn and make decisions.
Most businesses collect data without clear consent, don’t track where it comes from, or how it’s stored. This puts them at serious legal and reputational risk.
DPDP Act (India):
India’s Digital Personal Data Protection Act lays out how companies must collect, store, and use personal data.
Many businesses haven’t reviewed or adjusted their AI systems to comply with this law—especially around user consent, data usage, and protection practices.
EU AI Act:
This law groups AI systems into different risk levels—like low-risk, high-risk, or banned—based on what they’re used for.
Most companies using AI don’t know which risk category they fall under. That means they could face heavy fines or even bans without realizing they’re out of compliance.
Ethical Black Boxes:
When AI makes a decision, it’s often unclear how or why it made it—that’s the “black box” problem.
Without transparency or a way to audit these decisions, businesses can’t explain or fix biased, unethical, or harmful outcomes. And that’s a growing red flag in every industry.
The real risk isn’t AI. It’s underestimating AI governance.
So What Should You Do?
Conduct an AI audit: What models are in use, what data they touch, and what risks they pose.
Update compliance frameworks: Align with DPDP, EU AI Act, and global standards.
Train your teams: Not just engineers, but business leaders who sign off on AI projects.
Because if you think compliance is a blocker—wait till you see the cost of non-compliance.
📌 CTA:
Are Indian companies moving too fast with AI without building the right compliance muscle? Let’s talk.