“The United States has cautioned the European Union that its proposed law to regulate artificial intelligence, which aims to manage the development and use of AI, could inadvertently benefit larger tech companies at the expense of smaller startups, potentially stifling innovation.”
The U.S. State Department’s analysis of the upcoming legislation warns that the European Parliament’s version of the act could dampen productivity and potentially lead to a migration of jobs and investment to other markets. The analysis also suggests that the new rules could hamper investment in AI research and development in the EU, limiting the competitiveness of European firms.
The U.S. analysis focuses primarily on the European Parliament’s version of the AI Act, which includes rules on generative AI. However, the U.S. believes that some of these rules rely on terms that are “vague or indefinite,” potentially favoring companies with greater resources and harming smaller ones.
“The EU’s proposed AI law is a one-size-fits-all approach that will disproportionately impact small businesses,” said a spokesperson for the US Chamber of Commerce. “The law’s requirements will be too costly and time-consuming for small businesses to comply with, and they could stifle innovation in the EU.”
One U.S. concern is that the European Parliament focuses on how AI models are developed, whereas the U.S. would prefer an approach that focuses on the risk involved in how these models are actually used. The U.S. State Department feedback, including a line-by-line edit of certain provisions in the law, was shared with European counterparts in recent weeks.
The EU Parliament’s AI Act, which lawmakers voted on in June, would require more transparency about the source material used to train the large language models that underpin most generative AI products. That vote cleared the way for negotiations among parliament, the European Commission, and member states, and officials hope to have a deal by the end of the year for the final rules.
The U.S. analysis is in keeping with the State Department’s calls for a more hands-off approach to the technology so as not to stifle innovation. Secretary of State Antony Blinken objected to a number of the EU Parliament’s proposals to control generative AI during a meeting with commission officials in Sweden at the end of May.
In conclusion, the U.S. State Department’s warning about the E.U.’s proposed AI law highlights the complexities and potential unintended consequences of regulating emerging technologies. While the law aims to manage the development and use of AI, it could inadvertently favor larger tech companies at the expense of smaller startups, potentially stifling innovation. This situation underscores the importance of careful consideration and broad consultation in the development of such regulations. As AI continues to evolve and permeate various aspects of society, finding a balance between regulation, innovation, and fair competition will be a critical challenge for policymakers worldwide.
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