Calculating risk
The working Risk formula is probability × severity. High → avoid or change; medium → explore and mitigate. Plus the four technical assessment categories and the EU risk pyramid's four tiers.
Determine who needs to be involved (business + technical stakeholders) → understand business purposes and planned uses → enumerate potential harms incl. false positives, false negatives and numeric over- and under-predictions → assess the training data description incl. sensitive data → check whether the AI has been benchmarked against established alternative approaches. Then the formula → probability of the harm × potential (severity) of it happening. Result high → avoid or change the AI to prevent the harm. Result medium → explore and mitigate the risks.
- Intended task → what will it achieve
- Function & performance metrics
- Robustness → scalable, withstands more or less use
- Transparency → workings and intended consequences
All assessment criteria sum to one question → is the AI outcome ultimately fair?
| Tier | What it means |
|---|---|
| Unacceptable risk | Banned → social credit scoring, real-time remote facial recognition in public spaces |
| High risk | Harms safety or fundamental rights → mandatory requirements apply |
| Limited risk | Only transparency requirements prescribed |
| Minimal risk | No mandatory requirements → voluntary industry standards |
Risk assessment is context-specific → context comes from five places → owner and operator, industry and use case, social impacts, timing, jurisdiction. Tailoring the framework to context strengthens governance and enables informed, values-aligned decisions.
"Risk assessment of AI is both an art and a science." - Vivienne Artz
Memorise the actions → high risk = avoid or change, medium risk = explore and mitigate. And the unacceptable-tier bans → social credit scoring and real-time remote facial recognition in public spaces.
Key terms - quick answers
What is “Risk formula”?
What is “EU risk pyramid”?
What is “Unacceptable risk”?
Sources and study method
This independent lesson uses active recall, spaced retrieval and scenario practice. Read the full study method.