How to Classify an AI System? Learn the EU AI Act definition of AI system

The EU AI Act is now a reality, but for many organizations, the first hurdle isn't compliance—it's identification. Before you can assess risks or governance, you must answer a fundamental question: "Do we actually have an AI system, or is this just sophisticated software?"

The distinction is not semantic; it is legal. Misclassifying a complex statistical tool as "traditional software" could leave you exposed to unregulated liabilities. Conversely, over-classifying standard automation as AI creates unnecessary compliance burdens.

Consuflix helps clients with Legal and Compliance matters, and we can help you to conduct an AI Inventory Assessment to legally define your software assets under Article 3 of the EU AI Act. Contact us at info@consuflix.com or drop a message via contact form.

The Legal Definition (Article 3)

The EU AI Act (Article 3) moves away from vague technological buzzwords and provides a concrete legal definition. An "AI System" is defined as:

"A machine-based system designed to operate with varying levels of autonomy, that may exhibit adaptiveness after deployment and that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments."

While this sounds broad, the regulator has included specific "filters" to prevent every Excel macro from being regulated. To determine if your system falls under the Act, you must look for the Three Pillars of AI:

1. Autonomy

Traditional software follows a strict, pre-coded script. It does exactly what the human programmer told it to do, step-by-step. An AI System, however, operates with a degree of independence. It doesn't just execute a script; it navigates a task without constant human intervention, potentially taking actions that were not explicitly micro-managed by the user.

2. Inference (The "Magic" Factor)

This is the most critical differentiator.

• Traditional Software: Uses purely deductive logic. "If X happens, then do Y." The rules are fixed by the human.

• AI Systems: Use inference. They analyze data/inputs to derive the rules or patterns themselves. They don't just follow a formula; they create the path to the solution (e.g., predicting a loan default probability based on thousands of variables).

If your software merely executes a complex calculation based on fixed rules you set, it is likely not AI. If it analyzes data to "guess" or "predict" an outcome you didn't explicitly program, it is AI.

3. Adaptiveness (Optional but Common)

Many AI systems continue to learn after they are deployed (e.g., a recommendation engine that gets better the more you use it). While not all AI systems must be adaptive to be regulated, the capability to evolve without a software update is a strong indicator of an AI System.

Why the Distinction Matters for Your Business

The "Influence" clause in the definition is vital. The Act covers systems that generate outputs capable of influencing "physical or virtual environments."

This means an AI doesn't need to be a robot arm in a factory to be regulated.

• Virtual Influence: An AI algorithm filtering CVs for HR (influencing a career) or a credit scoring model (influencing financial access) is heavily regulated.

• Physical Influence: An AI controlling traffic lights or autonomous machinery.

If your system meets the definition of Article 3, you trigger a cascade of obligations—from data governance and transparency to fundamental rights impact assessments.

Conclusion

Defining your technology is the first line of defense. If you fail to identify an AI system, you miss the regulatory boat. If you label everything as AI, you drown in paperwork.

The goal is precision. You need to look under the hood of your software stack and apply the "Inference Test."

Consuflix helps clients with Legal and Compliance matters, and we can help you to comply with the EU AI Act. Let us audit your technology portfolio, clearly distinguishing between 'software' and 'AI systems' to ensure your compliance strategy is built on a solid foundation and Article 3 is duly respected to avoid fines.