RAND's policy analysis examines how AI algorithms' opacity creates fundamental privacy challenges around data collection, use, and decision-making, particularly in light of the EU AI Act's transparency requirements. The research explores regulatory approaches to address AI's lack of explainability while examining the tension between innovation and privacy protection under frameworks like GDPR and emerging U.S. state privacy laws. This authoritative government-sponsored research provides crucial insights for policymakers grappling with AI's transformative impact on privacy rights and the effectiveness of existing privacy legal frameworks.