The European AI Act 2026, what does it mean for your business continuity?

As a compliance manager or CTO in a software company, you know the feeling. Just as your organization has adapted to new regulations such as NIS2, the next regulatory wave is already approaching. The European AI Regulation, better known as the AI Act, will become fully applicable on 2 August 2026.

But what does this mean in practice for your business continuity? And more importantly, how do you ensure that both your organization and your customers remain protected?

The AI Act is not just another administrative obligation. It represents a fundamental shift in how organizations must approach artificial intelligence, risk management, and supplier dependency. In this article, we explain what the AI Act means for organizations that rely on software and AI systems, and how you can prepare strategically.

Why the AI Act truly matters

The AI Act is the world’s first large scale regulatory framework for artificial intelligence. Its objective is clear: AI systems must be safe, transparent, and ethically responsible.

The regulation follows a risk based approach with four categories:

• Unacceptable risk, prohibited
• High risk, strictly regulated
• Limited risk
• Minimal risk, largely unregulated

High risk AI is closer than you think

For organizations that develop or use software in sectors such as finance, logistics, healthcare, or public administration, the likelihood of dealing with high risk AI systems is significant. Examples include AI used for HR decision making, critical infrastructure, or medical diagnostics.

If you develop or deploy high risk AI systems, you must comply with strict requirements, including:

• Quality management systems covering the entire AI lifecycle
• Robust data governance with attention to bias and data quality
• Transparency and traceability through logging and documentation
• Human oversight of automated decisions
• Cybersecurity and operational resilience

The overlap with NIS2: when one plus one becomes three

The AI Act does not exist in isolation. Many organizations must also comply with the NIS2 Directive, which focuses on cybersecurity in critical sectors. NIS2 requires, among other things, that serious cybersecurity incidents are reported within 24 hours.

Dual compliance, one strategy

AI systems that support critical infrastructure often fall under both the AI Act and NIS2. This means your risk management, governance, and business continuity planning must address both frameworks simultaneously.

Business continuity is therefore no longer a purely technical concern. It has become a strategic compliance responsibility.

Supplier risk: the challenge you cannot ignore

One of the most significant challenges introduced by the AI Act is managing supplier risk. If your organization relies on AI solutions from external vendors, you as the user remain partially responsible for compliance.

This requires:

• Thorough due diligence when selecting AI suppliers
• Updated contracts with explicit compliance and transparency clauses
• Ongoing monitoring and audits
• Clear exit strategies in cases of non compliance or supplier failure

What is at stake?

Imagine your organization depends on a mission critical SaaS platform powered by an external AI model. If that supplier fails to comply with the AI Act, your organization faces immediate risks, including:

• Fines of up to €35 million or 7 percent of global annual turnover
• Operational disruptions
• Reputational damage
• Contractual claims from customers

Strengthening business continuity with Digital Escrow

This is where compliance and continuity come together. One effective way to mitigate supplier risk is by implementing Digital Escrow solutions.

At Escrow4All, we help organizations secure access to critical software, source code, and data, regardless of what happens to the supplier.

Digital Escrow in the context of the AI Act

In practice, this includes:

• Source code escrow for AI models and applications
• SaaS escrow for cloud based AI platforms, including runtime environments
• Data escrow for critical datasets
• ISO 27001 certified security, aligned with both NIS2 and the AI Act

By structurally implementing escrow arrangements, you increase customer confidence and demonstrably meet continuity requirements during procurement processes and audits.

Six steps to prepare for 2 August 2026

1. Inventory your AI systems

Identify which AI solutions your organization uses or develops and classify them according to the AI Act.

2. Assess your suppliers

Verify whether AI suppliers meet AI Act obligations and formalize requirements contractually.

3. Strengthen data governance

Ensure data quality, bias detection, and traceability are properly embedded and documented.

4. Integrate risk management

Align AI risk management with existing cybersecurity and business continuity processes.

5. Implement escrow arrangements

Protect critical AI systems and data against supplier failure.

6. Train your teams

Ensure legal, IT, and product teams understand their roles under the AI Act and NIS2.

Continuity as a competitive advantage

The AI Act and NIS2 are more than regulatory obligations. They represent an opportunity. Organizations that invest early in digital resilience, compliance, and supplier governance create a strategic advantage.

For software companies, offering integrated continuity assurances such as Digital Escrow as a Service is a powerful way to build trust and long term customer relationships.

Business continuity in 2026 is not optional. It is a prerequisite that defines your reputation, customer trust, and market position.

Start preparing today, so you are ready when the AI Act becomes fully applicable.