EU AI Act: Bureaucracy vs Innovation | Singularity Loading Bar #5

The EU AI Act raises challenges and opportunities for AI innovators, with potential restrictions particularly impacting open-source developers. Meanwhile, a new report highlights the massive economic potential of generative AI, which the EU seeks to restrict with copyright laws.

AI Innovation in the EU: The Thrill of Filling Form 27b/6

Innovation vs. Bureaucracy

The new EU AI Act, recently approved by the European Parliament, is set to significantly reshape the landscape of AI regulation. Margrethe Vestager, executive vice president of the EU Commission, has emphasized the Act’s role in preventing social manipulation, mass surveillance, and erosion of trust in information​.

Here are the key implications of the EU AI Act:

  • Emotion-Recognition AI: The Act bans the use of AI for recognizing emotions in policing, schools, and workplaces, an area where AI has been criticized for inaccuracy and bias.
  • Real-Time Biometrics and Predictive Policing: The Act aims to ban real-time biometric technologies and predictive policing in public spaces, sparking a legislative battle over enforcement.
  • Social Scoring: The practice of using data about people’s social behavior to classify and rank them will be outlawed.
  • Recommendation Algorithms on social media: Recommendation systems on social media platforms have been moved to a “high risk” category, increasing scrutiny and potential liability for tech companies.
  • Generative AI: The Act proposes ways to regulate generative AI, including banning the use of copyrighted material in the training set of large language models and requiring AI-generated content to be labeled.

Ah, nothing quite like a robust dose of regulation to really get those technological wheels spinning! Sure, citizens will indeed appreciate the EU’s efforts to restrict national governments from turning into a dystopian surveillance state. However, the attempt to regulate generative AI with laws from the 18th century (a nod to the beloved Copyright Act of 1790) suggests that our esteemed bureaucrats in Brussels and Strasbourg might still be trying to figure out this whole ‘AI thing’.

But never fear, most developers in Europe will certainly welcome the new Act. After all, who needs innovation when you can have pages upon pages of rules, guidelines, and restrictions? Surely, innovators are thrilled at the prospect of their AI systems having to pass a dozen bureaucratic tests before they can so much as blink digitally. Indeed, the EU’s forward-thinking approach is sure to catapult us into a future where the most exciting question in AI will be: “Did we remember to fill out form 27b/6?”

In all seriousness though, the proposed regulations on generative AI might especially impact small enterprises and the open-source community while playing into the hands of big tech, and thus should be carefully evaluated.

Significant Challenges and Opportunities for AI Innovators

The EU AI Act brings forward concerns for innovators and developers, with a potentially inhibiting effect on innovation and AI technology deployment due to its risk-based restrictions. Open-source developers face notable hurdles, as they are now expected to meet guidelines for risk management, data governance, technical documentation, and accuracy and cybersecurity standards. These demands could burden developers with liability for outcomes tied to their AI systems’ use, potentially centralizing AI power within big tech companies and obstructing crucial research. This may deter open-source AI contributions and impede the development of text-generating systems — vital tools for independent developers to compete with tech giants.

While some factions of the AI community argue for more application-specific regulations and caution against the inefficiencies of broad regulation, others embrace stricter open-source AI regulations as a way to set global standards. However, uncertainties surround the Act’s impact on LLMs like GPT-3, as the Act implies responsibility for managing an AI system’s use may fall on downstream deployers rather than initial developers. This could limit LLM use in varied applications.

AI startups also voice concerns about the Act’s vagueness, particularly its unclear stance on whether it would apply to “pre-trained” machine learning models at the heart of AI software or only to the software itself. Some critics warn that this lack of clarity could stifle innovation and competition in expanding AI markets.

Meanwhile, McKinsey Evaluates Generative AI’s Value at $4.4 Trillion Per Year


While the EU rolls out red tape to contain innovation, a recent report published by McKinsey outlines the economic potential of generative AI and its promise to redefine productivity and business operations on a global scale. According to the report, generative AI could add an astonishing $2.6 to $4.4 trillion annually across a myriad of use cases, which would significantly increase the overall impact of artificial intelligence on the global economy.

The primary beneficiaries of this technological breakthrough are expected to be customer operations, marketing and sales, software engineering, and R&D. Furthermore, the study anticipates a massive shift in employment, with generative AI automating activities that currently occupy 60 to 70 percent of employees’ time, thus accelerating workforce transformation and potentially boosting labor productivity growth. The report also emphasizes the need for significant investment in worker retraining and skill development to fully leverage the potential benefits of generative AI.

Navigating the Impact of the EU AI Act

In conclusion, the EU AI Act represents a significant milestone in AI regulation, raising concerns and opportunities for AI innovators and developers. The Act’s risk-based approach introduces restrictions that could impact innovation and the development of new AI technologies. Especially open-source developers may face challenges in adhering to guidelines and potential liability for their AI systems. Uncertainties surround the Act’s impact on large language models and its application to pre-trained models. Meanwhile, the McKinsey report highlights the immense economic potential of generative AI. The Act’s implementation and ongoing discussions will shape the future of AI regulation in Europe, requiring stakeholders to stay informed and adapt their strategies accordingly.

Share your thoughts on AI regulation and join the discussion by leaving a comment. Your perspectives and insights are highly appreciated!

This post is also available in German.

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This article was created with the assistance of a human.

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