AI ACT – Securing our safety or killing innovation?

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The AI act is a proposed regulation that aims to establish harmonized rules on artificial intelligence in the EU. It is based on a risk-based approach, meaning that the higher the risk of an AI system, the stricter the rules it has to comply with. The AI act also intends to foster innovation and investment in AI across Europe, while ensuring that AI systems respect fundamental rights and values.

The impact of the AI act on the European artificial industry could be significant, as it would create a common legal framework and a level playing field for AI providers and users in the EU.

The proposed AI Act (European Commission, 2021), which at time of writing is still to be finalised between the EU institutions 2 , seems to be a poor fit for foundation models. It follows the risk-approach, following the idea, that each AI application can be put into a specific risk category, taking into account it’s intended application. This follows the traditional EU approach, where a single product can be neatly pute into a single category, but this ignores the specifics of the AI technology and foundation models, which easily can be customized to great many potential uses.

In the ongoing legislative work to amend the text, the European Parliament has proposed that providers of foundation models perform basic due diligence on their offerings. In particular, this should include:

Risk identification. Even though it is not possible to identify in advance all potential use cases of a foundation model, providers are typically aware of certain vectors of risk. OpenAI knew, for instance, that the training dataset for GPT-4 featured certain language biases because over 60 percent of all websites are in English. The European Parliament would make it mandatory to identify and mitigate reasonably foreseeable risks, in this case inaccuracy and discrimination, with the support of independent experts.
Testing. Providers should seek to ensure that foundation models achieve appropriate levels of performance, predictability, interpretability, safety and cybersecurity. Since the foundation model functions as a building block for many downstream AI systems, it should meet certain minimum standards.
Documentation. Providers of foundation models would be required to provide substantial documentation and intelligible usage instructions. This is essential not only to help downstream AI system providers better understand what exactly they are refining or fine-tuning, but also to enable them to comply with any regulatory requirements.

The impact of the AI act on the European artificial industry could be quite significant.

Yet, some of the potential benefits of the AI act for the industry are:

Increased trust and acceptance of AI by consumers and society, as they can be assured that AI systems are safe, reliable and ethical.
Reduced fragmentation and legal uncertainty, as the AI act would harmonise the rules and requirements for AI across the EU, and provide a single market for AI products and services.
Enhanced competitiveness and innovation, as the AI act would stimulate research and development on AI, support the uptake of AI by small and medium-sized enterprises, and facilitate the access to data and computing resources.
Greater influence and leadership, as the AI act would set a global standard for AI regulation, and promote the European approach to AI in the international arena.

However, the AI act could also pose some challenges and costs for the industry, such as:

Increased compliance burden and administrative costs, as the AI act would impose new obligations and responsibilities for AI providers and users, especially for high-risk AI systems.
Potential trade barriers and market distortions, as the AI act could create differences and conflicts with other jurisdictions that have different or no rules on AI, and affect the competitiveness of European AI actors in the global market.
Possible unintended consequences and risks, as the AI act could have negative impacts on innovation, diversity, and inclusion, if it is not implemented and enforced in a balanced and proportionate way.

The French president Emanuel Macron, has repeatedly warned against stifling innovation with the AI act. It’s hard to see him as objective though, with the large sums invested by the French government into the development of AI.

Proposals to regulate AI are a source of concern for France and the French companies involved, insofar as some feel that they may stifle innovation by imposing overly burdensome obligations.

Thierry Breton, the French Commissioner for the Internal Market of the European Union, has defended the proposed new regulatory scheme against threats of some CEOs in the technology sector that they would leave the EU market because of the rigidity of the proposal: “No companies will do that, as the EU market is the biggest digital market, and we welcome everyone.”

Personally, I believe, that the AI act is something that is extremely necessary to provide a legal framework for the uses of the Artificial intelligence. The general text of the AI act will be only seen as guidelines to be followed, and the practice in various countries will be the determining factor, whether it will stifle or encourage innovation in the field. As of today, we still do know what the final version of the AI act will be. Furthermore, it will become law years from today, giving everyone ample time necessary to prepare for the new regulations, while similarly protecting us from a scenario in which the AI field will be the new wild west.

AI used – BING CHAT: