Denmark on Wednesday laid out a framework that can help EU member states use generative artificial intelligence in compliance with the European Union’s strict new AI Act — and Microsoft‘s already on board.

A government-backed alliance of major Danish corporates, led by IT consultancy Netcompany, launched the “Responsible Use of AI Assistants in the Public and Private Sector” white paper, a blueprint that sets out “best-practice examples” for how firms should use and support employees in deploying AI systems in a regulated environment.

The guide also aims to encourage delivery of “secure and reliable services” by businesses to consumers. Denmark’s Agency for Digital Government, the country’s central business registry CVR and pensions authority ATP are among the founding partners adopting the framework.

This includes guidelines governing how the public and private sector collaborate, deploying AI in society, complying with both the AI Act and General Data Protection Regulation (GDPR), mitigating risks and reducing bias, scaling AI implementation, storing data securely, and training up staff.

Netcompany CEO André Rogaczewski said the provisions laid out in the white paper were primarily aimed at companies in heavily regulated industries, such as in financial services. He told CNBC he’s aiming to address one core question: “How can we scale the responsible usage of AI?”

The EU AI Act is a landmark law that aims to govern the way companies develop, use and apply AI. It came into force in August, after previously receiving final approval from EU member states, lawmakers, and the European Commission — the executive body of the EU — in May.

The law applies a risk-based approach to governing AI, meaning various applications of the technology are treated differently depending on the risk level they pose. It’s been touted as the world’s first major AI law that will give firms clarity under a harmonized, EU-wide regulatory framework.

Though the rules are technically in effect, implementation them is a lengthy process. Most of the provisions of the Act — including rules for general-purpose AI systems like OpenAI’s ChatGPT — won’t materialize until at least 2026, at the end of a two-year transition period.

“It is absolutely vital for the competitiveness of our businesses and future progress of Europe that both the private and public sector will succeed in developing and using AI in the years to come,” Caroline Stage Olsen, Denmark’s minister of digital affairs, told CNBC, calling the white paper a “helpful step” toward that goal.

Netcompany’s Rogaczewski told CNBC that pitched the idea for a white paper to some of Denmark’s biggest banks and insurance firms some months ago. He found that, though each organization was “experimenting” with AI, institutions lacked a “common standard” to get the most out of the tech.

Rogaczewski hopes the Danish white paper will also offer a blue print for other countries and businesses seeking to simplify compliance with the EU AI Act.

Microsoft’s decision to sign up to the guidelines is of particular note. “Getting Microsoft involved was important since generative AI solutions often involve algorithms and global tech,” said Rogaczewski, adding the tech giant’s involvement underlines how responsible digitization is possibility across borders.

The U.S. tech giant is a major backer of ChatGPT developer OpenA, which secured a $157 billion valuation this year. Microsoft also licenses OpenAI’s technology out to enterprise firms via its Azure cloud computing platform.

Chinese social media and gaming company Tencent on Wednesday reported better-than-expected profit in the third quarter, spurred by growth in games, advertising and cloud services.

Tencent reported profit attributable to shareholders of 53.23 billion yuan ($7.37 billion) in the third quarter, compared with a LSEG estimate of 46.18 billion yuan over the period.

The company’s revenue came in at 167.19 billion yuan, short of the 167.82 billion yuan analyst forecast.

This breaking news story is being updated.

The West shouldn’t assume that China is lagging behind the U.S. and Europe on tech developments, Microsoft’s president and vice-chairman warned.

U.S-China tensions in the past few years have centered on the battle between the two nations for tech supremacy, culminating in a slew of export controls on critical technologies. Late last year, China’s Huawei surprised the market with the release of a smartphone whose reviews indicated downloads speeds associated with 5G, sparking speculation of an apparent chip breakthrough that defied U.S. tech sanctions.

Speaking at the Web Summit tech conference in Lisbon, Portugal, on Tuesday, Microsoft’s Brad Smith told CNBC that “in many ways,” China is close to or is even catching up on technology.

“I think one of the dangers, frankly, is that people who don’t go to China too often assume that they’re behind,” he told CNBC’s Karen Tso. “But when you go there, you’re impressed by how much they’re doing.”

He predicted that Chinese and American companies will be competing on technology into the distant future and urged U.S. and European companies to collaborate to grow economies and bring new advancements like artificial intelligence to the rest of the world.

Microsoft has operated in China since 1992, according to the company’s web page, including through its largest research and development center outside the U.S. Microsoft CEO Satya Nadella said last year that the firm wasn’t focused on China as a domestic market, but that it provides services to Chinese companies and has a more visible presence locally than do many other U.S. tech giants.

Asked about whether trade and tech transfers — or the movement of data, designs or innovations — with China will get more challenging as Washington transitions between the administrations of U.S. incumbent leader Joe Biden and President-elect Donald Trump, Smith it was too early tor know.

“The truth is, as an American technology company, we can do business in China only when we are offering a service that the Chinese government wants to have there, and the U.S. government wants us to bring there,” he said, adding, “And in some cases they look at, say, a data center to support a Mercedes or a Siemens or a Starbucks or a General Motors — there seems to be a level of comfort. In consumer services, not really.”

He predicted that we’ll live in a world where some technology will move to China, and it won’t be the tech firms that decide.

—CNBC’s Jordan Novet contributed to this article.