EU AI Act Article 4: What Does AI Literacy Mean for Your Organisation?

Since the European AI Regulation (the EU AI Act) officially entered into force in August 2024, organisations across Europe have been preparing for a new regulatory landscape. While much attention has focused on the classification of high-risk AI systems and their associated compliance obligations, one article is consistently underestimated: Article 4 — AI literacy. This article imposes a broad, horizontal obligation that applies to every organisation that provides or deploys AI systems, regardless of the risk level of those systems.

In this article, we dissect what Article 4 precisely prescribes, who the obligation applies to, which deadlines are relevant and — most importantly — what concrete steps your organisation can take now to achieve compliance and derive strategic advantage from it.

What does Article 4 say?

The text of Article 4 is concise but far-reaching. In essence, it requires both providers (providers) and users (deployers) of AI systems to ensure that their staff and other involved persons possess a sufficient level of AI literacy. The regulation defines AI literacy as the set of skills, knowledge and understanding that enables individuals to use AI systems in an informed manner and to be aware of the opportunities and risks of AI, as well as the potential harm such systems can cause.

Three elements stand out in this definition. First, the obligation is proportional: the required level of literacy depends on the context, the role of the individual and the type of AI system. A compliance officer overseeing a high-risk credit scoring model requires a different level of knowledge than an HR professional using an AI-powered scheduling tool. Second, the scope is broad: it concerns not only developers or data scientists, but everyone in the organisation who works with AI systems or makes decisions about them. Third, the obligation is ongoing: AI literacy is not a one-time checkbox, but requires continuous upskilling as technologies and regulations evolve.

Who does the obligation apply to?

Unlike many other provisions in the EU AI Act that specifically target high-risk systems, Article 4 has no risk classification restriction. The obligation applies to all providers and users of AI systems on the European market. This means that organisations that exclusively deploy low or minimal risk AI systems — such as customer service chatbots, AI-powered email filters or generative AI tools for content creation — also fall under this obligation.

For Dutch organisations in regulated sectors such as financial services, healthcare and the public sector, this has direct consequences. Most of these organisations already use dozens of AI applications, often without a centralised overview of which systems are in use and who works with them. The first step towards AI literacy is therefore obtaining that overview.

The obligation furthermore extends to board members and supervisory directors. It is not sufficient to train only operational staff; senior management must also be capable of making informed decisions about the deployment, risks and governance of AI systems. For boards of financial institutions, regulators such as DNB and AFM are paying increasing attention to whether directors have sufficient knowledge of the technologies their organisation deploys.

Timeline and enforcement

The EU AI Act follows a phased implementation timeline. Article 4 on AI literacy is among the provisions that take effect first: from 2 February 2025 the obligation applies. This makes it one of the first articles for which organisations are actually held accountable. By the time you read this, the deadline has already passed.

Enforcement will be carried out by the national supervisory authorities designated by each member state. In the Netherlands, the exact distribution of supervisory tasks is still under development, but it is likely that the Dutch Data Protection Authority (AP), AFM and sector-specific regulators will play a role. While fines under the AI Act can reach up to 35 million euros or 7% of global annual turnover, it is more probable that regulators will initially focus on awareness and standard-setting. This does not alter the fact that organisations that demonstrably take no action expose themselves to reputational risks and potential enforcement actions.

AI literacy versus traditional training

Many organisations have existing training programmes in the areas of digital skills, information security or data protection. The temptation is to simply add AI literacy as an additional module to these programmes. While integration with existing structures is sensible, AI literacy demands a fundamentally broader approach.

Traditional compliance training typically focuses on knowing rules and procedures. AI literacy goes further: it requires employees to understand how AI systems arrive at their outcomes, what limitations and biases are inherent in these systems, and when human oversight or intervention is necessary. This is not something you solve with an annual 45-minute e-learning module.

Effective AI literacy encompasses at least three levels. At the foundational level, all employees understand what AI is, how it differs from traditional software, and which ethical and legal frameworks apply. At the application level, employees who work with AI systems daily know how to critically evaluate output, when to escalate and how to recognise biases or errors. At the strategic level, board members and senior managers are capable of steering the organisation-wide AI strategy, weighing risks and meeting governance requirements.

Five concrete steps to take now

Based on our experience with regulated Dutch organisations, we recommend the following approach:

1. Map your AI landscape. Before you can determine who needs which knowledge, you need to know which AI systems your organisation uses. This sounds straightforward, but in practice few organisations have a complete overview. Shadow AI — the use of AI tools such as ChatGPT or Copilot without IT approval — adds further complexity. Start with an inventory that covers both formally approved systems and informally used tools.

2. Define roles and knowledge levels. Not everyone needs to know everything. Establish a competency framework that specifies per role or function group which level of AI literacy is required. Account for the proportionality requirement in the regulation: an employee operating an AI system with direct impact on citizens or customers needs a higher knowledge level than someone using an AI-powered internal tool.

3. Develop a differentiated training programme. Build on existing training infrastructure, but ensure content that is specifically tailored to AI. Combine theoretical knowledge (what is AI, how does machine learning work, what are the risks) with practical skills (how do I evaluate AI output, how do I recognise bias, when do I escalate). Consider formats that stimulate engagement: workshops, case studies from your own sector and hands-on sessions with the AI tools that are actually in use.

4. Embed AI literacy in your governance structure. AI literacy is not a one-off project but an ongoing responsibility. Assign ownership — for example to the CISO, CDO or a newly appointed AI governance officer — and integrate AI literacy into existing processes such as onboarding, periodic reviews and governance reporting. Document your efforts carefully; for regulators the rule is: what is not documented, has not been done.

5. Measure, evaluate and improve. Establish measurable indicators for AI literacy: training participation, knowledge assessment results, incident reports related to AI use. Periodically evaluate whether the programme still aligns with the rapidly changing technological reality and adjust where necessary. The AI Act is a living framework; your approach to literacy must be as well.

The strategic dimension: from compliance to competitive advantage

It is tempting to approach AI literacy purely as a compliance obligation. But organisations that take a broader view reap the benefits. McKinsey research consistently shows that the gap between AI leaders and laggards is widening, and that the determining factor is not technology but organisational readiness: the extent to which people, processes and culture are equipped to deploy AI effectively.

An AI-literate organisation adopts new technology faster, identifies risks earlier and creates more value from AI investments. The difference between an organisation that treats AI literacy as a tick-box exercise and one that embraces it as a strategic pillar translates directly into the quality of decision-making, the speed of innovation and the ability to attract talent that makes the difference in an AI-driven economy.

For board members and supervisory directors, the message is clear: Article 4 is not a burden, but a catalyst. It compels you to ask the question you should be asking anyway: is our organisation ready for a future in which AI is ubiquitous? And if not, what are we prepared to do about it?

Conclusion

Article 4 of the EU AI Act sets an apparently simple but fundamentally impactful requirement: ensure your people understand AI. The obligation applies now, to all organisations that use or provide AI, and extends from the work floor to the boardroom. Organisations that take this seriously not only strengthen their compliance position but lay the foundation for responsible and value-creating AI adoption.

The first step need not be a large one. But it must be taken now.