AI Literacy: A Practical Guide for Businesses

Today marks the one-year anniversary of the AI literacy obligation under the EU AI Act—yet many businesses are still grappling with what meaningful compliance looks like in practice. Since 2 February 2025, organisations have been required to ensure that those working with or impacted by AI systems understand not only what AI does, but how it works and the risks it presents.

Over the past year, AI has become embedded in everyday business operations, from automation to customer engagement. But as adoption accelerates, so does the need for practical understanding. Many organisations are still navigating this requirement in real time asking: what practical steps should my business be taking to stay compliant and effective? Below is a breakdown of what AI literacy really means in practice, who needs to act, what “adequate” looks like, and a simple to-do list on what you can start with today.

• What Is AI Literacy?

  To refresh our memories, under Article 4 of the EU AI Act, AI literacy means that organisations must equip relevant people with the skills, knowledge, and understanding that allow them to responsibly deploy, use, and respond to AI systems in their operational context.

  In practical terms, AI literacy refers to:

  • A basic understanding of what AI is and how it functions;

  • Awareness of how AI is used within the organisation;

  • An ability to interpret AI outputs appropriately;

  • An understanding of potential limitations and risks.

  The goal is not technical mastery, but informed and responsible use of AI in a business context.

• Which Businesses Are Affected?

  Item descriptionThe obligation applies to:

  • AI providers (those who develop or place AI systems on the market); and

  • AI deployers (those who use AI systems in their operations).

  • Others acting on behalf of these organisations, such as freelancers, service providers, or contracted operators.

  This includes many SMEs that use commonly available AI tools, such as generative AI platforms, automated decision-making software, or AI-based analytics.

• When Does the Obligation Apply?

  The AI literacy obligation has applied since 2 February 2025. While enforcement by national authorities will begin from 3 August 2026 onwards, businesses are encouraged to take reasonable steps now to ensure that relevant staff are appropriately informed.

• What Does “Adequate” AI Literacy Look Like?

  The legislation does not prescribe a single template. Instead, it requires a context-sensitive approach that reflects your organisation’s specific AI use and risk profile. In other words, businesses are expected to take reasonable and appropriate measures based on their situation.

  At minimum, your AI literacy initiative should address the following core areas:

  1. General AI Awareness

  Ensure staff and relevant partners understand:

  • What AI is and how it works;

  • The specific AI systems your organisation uses;

  • The purpose of those systems;

  • The difference between automated outputs and human judgement.

  2. Understanding Limitations

  AI literacy includes recognising that:

  • AI outputs may be inaccurate or incomplete;

  • Generative AI can produce plausible but incorrect information (e.g., hallucinations);

  • Human oversight remains important.

  3. Role-Specific Knowledge

  The level of understanding required depends on:

  • The person’s role;

  • How closely they work with AI;

  • The potential impact of the AI system on customers, employees or third parties.

  4. Practical Guidance

  People working with AI should know:

  • When and how to question AI outputs;

  • When to escalate issues;

  • How AI use aligns with internal policies and legal obligations.

  5. Record Keeping

  While no external certification is required, organisations should keep internal documentation of your literacy actions. This helps demonstrate compliance in case of review.

• What Training Formats Are Acceptable?

  There’s no one-size-fits-all approach. AI literacy may be delivered through:

  • Formal training sessions;

  • Practical workshops;

  • Written guidance or internal policies;

  • Targeted briefings for specific teams or use cases.

  The key is that the learning must be meaningful, relevant and demonstrable.

• A Simple AI Literacy To-Do List

  For many businesses, a practical starting point includes:

  1. Map your AI use across departments;

  2. Determine who interacts with those systems;

  3. Identify who needs what level of AI understanding;

  4. Define clear learning objectives tailored to risk and role;

  5. Develop or source training materials that cover those objectives;

  6. Track and document participation and outcomes;

  7. Re-evaluate periodically as your AI use evolves.

  The Dutch Data Protection Authority also underlines the importance of AI literacy and has provided practical guidance to “Get started with AI Literacy” and “Building AI literacy”.

Need Support Translating AI Literacy into Practice?

Understanding how the AI Act applies to your business does not have to be complex. FBQ Legal supports organisations in assessing their AI use, clarifying obligations and designing proportionate AI governance measures, including AI literacy initiatives.

If you would like guidance tailored to your organisation, FBQ Legal is available to assist.