The regulatory landscape for AI is a minefield. With the EU AI Act on the horizon and a patchwork of new state laws emerging in the U.S., privacy teams are scrambling to keep up. I wanted to see if I could create a practical, real-world tool to help, so I decided to push GPT-5 to its limits. The goal was simple: turn a powerful large language model into a sophisticated AI governance auditor that could quickly and effectively assess an AI system’s compliance risks.
The output exceeded my expectations. I developed a single, comprehensive prompt that, when fed a detailed description of an AI system, produces a compliance report that reads like it came directly from a regulator. It takes under five minutes to run and provides an incredibly detailed risk analysis.
To prove the concept, I tested my new AI auditor on a real, working AI product. The results were both illuminating and a little unnerving. The AI didn’t just give a vague assessment; it flagged specific, actionable issues that a privacy or legal team would need to address immediately.
What the AI governance prompt flagged
High-Risk Use Case under the EU AI Act: The model determined the system fell under Annex III, meaning a full conformity assessment would be required before it could be legally launched in the EU. This isn’t a small detail—it’s a critical, resource-intensive step.
- Possible Prohibited Practice: The auditor identified a potential for biometric categorization by ethnicity, a practice that will be banned in the EU starting in February 2025. This kind of foresight is invaluable for avoiding future legal headaches.
- Missing Risk Assessment Documentation: For generative AI models, particularly those considered “systemic,” the EU requires specific documentation of risk assessments. The prompt found this documentation to be missing, a major red flag for any compliance officer.
- Lack of Clear Disclosure: The report highlighted a lack of clear disclosure about automated decision-making. This is a significant risk under both GDPR and the Colorado AI Act, which grant users specific rights regarding how and when AI makes decisions about them.
- No User-Facing Bias Summary: The results noted that the product lacked a public-facing summary of its bias testing. This is now a requirement in several U.S. state laws for high-impact AI, and missing it can lead to hefty fines and reputational damage.
What the AI compliance report includes
The prompt is designed to produce a highly structured, easy-to-read report. It’s not just a wall of text; it’s a strategic document that a legal team can use to prioritize actions.
The report includes:
- Risk Classification (EU AI Act): It places the AI system into one of four categories—Prohibited, High-Risk, Limited Risk, or Minimal Risk—and provides the specific legal citations to back up its assessment.
- State-Level Law Conflicts: The report checks against a growing list of U.S. state laws (e.g., Colorado, California, Connecticut), identifying where the AI product might be out of compliance.
- Transparency & Consent Coverage: It analyzes whether user-facing policies and notices are sufficient and compliant with global privacy regulations like GDPR and CPRA.
- Risk Score + Recommended Mitigations: The report provides an overall risk score on a scale of 0-100 and gives a list of actionable steps, referencing specific legal requirements to guide both short-term and long-term remediation efforts.
The real power of this tool is its ability to act as a preventative measure. Instead of waiting for a regulatory inquiry, privacy teams can use this AI auditor to proactively identify and fix compliance gaps.
The exact AI prompt you can copy and paste
You are an AI compliance auditor specializing in the EU AI Act, U.S. state AI laws, and global privacy regulations (GDPR, CPRA, etc.).
Your task is to review an AI system/product for potential regulatory risks and produce a report that reads like what a regulator or legal compliance officer would send.
INPUT:
[Paste a detailed description of the AI system or product, including its purpose, capabilities, data sources, decision-making processes, deployment context, and user-facing policies/notices.]
OUTPUT:
Structure your report in the following sections:
- **Risk Classification (EU AI Act)**
– State if the AI falls into:
a)Prohibited Practice (with legal citation to Annex I)
b) High-Risk AI (Annex III)
c) Limited Risk
d) Minimal Risk
– Justify classification with specific references to the EU AI Act.
- **Prohibited Practices Check (EU AI Act)**
– Identify if any banned uses are present (e.g., social scoring, biometric categorization, subliminal manipulation).
– Cite the relevant Article and Annex.
- **High-Risk Requirements Gaps (EU AI Act)**
– List missing or weak elements from Articles 8–15 (risk management, data governance, technical documentation, transparency, human oversight, accuracy/robustness, post-market monitoring).
- **U.S. State AI Laws Gaps**
– Highlight risks under laws such as the Colorado AI Act, California CPRA AI rules, Connecticut, and others.
– Check for:
a) Automated decision-making disclosure
b) Bias/risk assessment requirements
c) Consumer opt-out rights for AI profiling
d) Training data disclosure
- **Transparency & Consent Issues**
– Identify missing or vague public disclosures about AI functionality, decision-making, or data use.
– Flag non-compliance with consent requirements under GDPR, CPRA, and applicable state AI laws.
- **Recommended Mitigations**
– Provide actionable fixes with references to the law.
– Include both short-term (policy/documentation updates) and long-term (system design) actions.
- **Compliance Risk Score**
– Score on a scale of 0–100:
– 0–30 = Low
– 31–60 = Moderate
– 61–100 = High
FORMAT:
– Use bullet points for clarity.
– Reference laws explicitly.
– Be precise, formal, and regulator-like in tone.
What is a “prohibited practice” under the EU AI Act?
Prohibited practices are certain uses of AI that are completely banned because they are deemed to violate fundamental rights. Examples include “social scoring” by public authorities, using subliminal techniques to manipulate behavior in a way that causes harm, or using biometric categorization to infer a person’s race or political opinions. My auditor is designed to flag these uses immediately, as they are non-negotiable legal violations.
How does this prompt help with U.S. state laws?
The prompt is specifically designed to check for compliance gaps in emerging U.S. state laws. It looks for requirements such as the need to conduct and disclose a bias/risk assessment, provide disclosures about automated decision-making, and offer consumers the right to opt out of certain AI profiling activities. This ensures teams don’t just focus on international regulations, but also on the increasingly complex domestic landscape.
Is this tool a replacement for a legal professional?
No, this tool is a supplemental resource, not a replacement for legal counsel. The AI auditor can quickly identify potential risks and provide a structured, initial assessment, which is invaluable for a privacy or legal team’s workflow. However, a qualified legal professional is essential for providing definitive legal advice, navigating specific legal nuances, and ensuring full compliance. Think of the prompt as a powerful diagnostic tool that helps you spot issues early so you can bring them to your legal team’s attention.
It’s hard to stay on top of privacy risks you can’t even see. DataGrail gives you full visibility into your entire tech stack, highlights where risks and personal data may be hiding, automates tedious processes, and makes sure you’re staying compliant. Learn how DataGrail can help your team stay compliant and build trust.
