European business leaders are worried that the EU will overregulate A.I. and leave Europe trailing the U.S. in future productivity. A group of over 150 executives including the CEOs of Renault and Siemens, the executive director of Heineken, and the chief A.I. scientist of Meta, signed an open letter to the European Parliament on Friday, requesting the government pull back their proposed restrictions.
“Such regulation could lead to highly innovative companies moving their activities abroad, investors withdrawing their capital from the development of European Foundation Models and European AI in general,” the letter read. “The result would be a critical productivity gap between the two sides of the Atlantic.”
The letter takes aim at a proposed law that’s been in the works for two years and was greenlit on June 14. The final version of the law may be passed later this year. Called the AI Act, the law would be the strictest regulation of generative A.I. in the world, dividing the use of A.I. into various risk categories.
For uses of the technology labeled “high risk,” companies would have to pass through multiple rounds of tests to get their activities approved, akin to pharmaceutical companies doing clinical trials on new drugs. High-risk uses of A.I. would include applications in the energy or legal system, or applications that have the potential to harm or disadvantage people, including use in screening job applications or for distributing government benefits.
“At a time when we are still learning about the potential opportunities and risks of these technologies, the EU AI Act will provide much needed protections from harm for people affected by their use,” Francine Bennett, interim director of the Ada Lovelace Institute, which researches A.I. ethics, said. “Without these rules, the full weight of compliance requirements would also fall on developers and deployers…something which is more likely to stifle innovation.”
Some uses of A.I. would be completely banned under the proposed framework, including facial recognition A.I. and the scraping of biometric data (unique data that can identify individuals) from social media. The AI Act also emphasizes transparency and would require companies to disclose much more data on their technology than they currently do, including the copyrighted material used to train their systems. The cohort of execs who signed the letter thinks these regulations could curtail progress and fumble a huge opportunity for Europe to get ahead in the A.I. productivity race.
“We are convinced that our future significantly depends on Europe becoming part of the technological avant-garde, especially in such an important field as (generative) artificial intelligence,” the letter read. “For this reason, we appeal to the European decision-makers to revise the latest version of the AI act and agree on a proportionate, forward looking legislation which will contribute to European competitiveness while protecting our society.”
The letter expresses concern that the AI Act will hinder progress at a crucial inflection point in A.I. development. In imposing heavy restrictions now, execs think the EU runs the risk of setting European businesses behind in the long run.
“The first problem is that it’s the first of its kind worldwide,” Georg Ringe, co-founder of the Hamburg Network for AI & Law, said. “We’re not as fast as U.S. firms with technology side, but we are already the first ones moving ahead with regulation, and that makes it even more difficult to catch up.”
The addition of bureaucracy, safeguards, and transparency requirements may also drive A.I. business away from Europe, but Ringe says the big players likely don’t have to worry. It’ll be the startups who will bear the brunt of the restrictions’ burden.
“The Googles of this world, they have an armada of lawyers,” Ringe, also a corporate law professor at the University of Hamburg, said. “For them, it’s not going to be a super big problem, but the problem will be for startups and small new firms. They may think twice of either doing anything, or doing it in Europe.”
The EU’s regulations are the furthest along in the world, with policymakers in the U.S. and China still in the drafting phase. In Washington, Senators are being briefed on A.I. this summer and will consider legislation in coming months. Beijing released a set of not yet greenlit draft rules for A.I. in April, which required strict adherence to the Chinese Communist Party’s censorship rules.
There could be an advantage in being the first state to pass A.I. legislation, according to Ringe. In the past, the EU has been a global pioneer in technology regulation, namely with the General Data Protection Regulation implemented in 2018. The law gave Europeans increased rights and control over their data, and inspired similar models across many countries, eventually becoming somewhat of a global standard.
“To be the first mover globally can also be an advantage sometimes, because you set the pace and hope that other parts of the world will follow suit,” Ringe said.
The letter to the EU compared A.I. to the invention of the internet and silicon chips, saying that the nations that develop the most powerful large language models (the category of chatbot that includes GPT-4 and Bard) will have a competitive advantage on the world stage.
“Under the version recently adopted by the European Parliament, foundation models, regardless of their use cases, would be heavily regulated, and companies developing and implementing such systems would face disproportionate compliance costs and disproportionate liability risks.”
The letter proposed that the EU stick to developing “broad principles” with an expert regulatory body, rather than a strict set of restrictions. It also said the regulatory body should stay agile and constantly adapt to the pace of A.I. advancement and emerging risks, and stay “in dialogue with the economy,” underscoring the execs’ anxiety over being sidelined in the business world.
In the future, A.I. will replace search engines and will provide everyone with a personal assistant, changing not just the economy but also culture, according to the statement.
“In our assessment, the draft legislation would jeopardise Europe’s competitiveness and technological sovereignty without effectively tackling the challenges we are and will be facing,” the letter read.
Ringe is not very optimistic that the letter will elicit change in the AI Act, saying that policymakers in Brussels are determined to push it through. In his opinion, the law slants too heavily to the side of regulation without enough attention to cultivating the blooming A.I. industry.
“We need to strike a balance between facilitation and creating a level playing field, but also promoting and encouraging innovation in this field,” the professor said. “My personal view is that the AI Act is rather geared towards addressing potential problems and perceiving risks everywhere, and erring on the side of caution.”
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