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Innovation vs. Regulation: The New European AI Law and its Global Impact.

This week, the European Parliament gave the green light to the world’s first regulation on artificial intelligence. If you want to read the complete text (459 pages) you can download it from here.

However, don’t worry, I’ll give you a summary of it at the end of this post.

A delicate balance between the protection and promotion of innovation and its practical application.

The EU regulation on artificial intelligence may represent a significant step towards the regulation of a technology with transformative potential and associated risks.

The law establishes a framework that aims to ensure that the development and use of AI is safe, transparent and respectful of human rights, which may seem essential to foster public confidence in these technologies.

However, from a critical point of view, the regulation could also face challenges in its implementation, such as the definition of “high risk” and the adaptation to the rapid technological evolution.

Moreover, while regulation is crucial to address AI risks, there is a danger that overly stringent restrictions could inhibit innovation and technological development, placing the EU in a potentially disadvantageous position in the global AI landscape.

Do not miss this video in which he explains the chronology from the appearance of ChatGPT and the subsequent reactions of governments and institutions to the current regulation, to put, in my opinion. doors to the field. and to some extent stop innovation.

This law, which has been the result of five years of negotiations, aims to strike a balance between the enormous potential of AI and the risks that its uncontrolled implementation may entail.

Key aspects of the Law

Risk analysis and transparency: One of the pillars of the law is the obligation to conduct a thorough risk analysis before implementing AI systems considered high risk. This proactive approach seeks to minimize potential negative consequences for society by ensuring that corrective action is taken before products or services reach the market.

Prohibitions and restrictions: The legislation establishes clear limits on the use of AI, such as the prohibition of facial recognition systems in public spaces without prior judicial authorization. This measure underlines Europe’s commitment to the protection of individual rights against technological surveillance.

Creation of a regulatory agency: The law provides for the creation of a European Artificial Intelligence Agency, which will play a crucial role in monitoring and enforcement. The agency will have the authority to impose significant penalties on companies that break the rules, underscoring the seriousness with which Europe approaches AI regulation.

Reactions and perspectives. While the law has been received with enthusiasm by those advocating for greater regulation of the technology, it has also faced criticism and pressure from different sectors. The legislative process has revealed the intensity of the debates surrounding the future of AI and its integration into society.

Infografía Reglamento IA UE Salvador Vilalta
Europe on stage

The law not only has implications for the European internal market but also positions Europe as an influential player on the global AI scene. European companies such as Aleph Alpha of Germany and Mistral France is boosted by this law, although they still face the challenge of competing with U.S. technology giants. like OpenAI y Google.

Does this regulation seek to protect European AI companies?

First, it is crucial to understand that the law establishes a regulatory framework that all companies, both European and foreign, must follow to operate within the EU. This means that, in theory, legislation is applied uniformly without explicitly favoring local actors over international ones. However, European companies, being more familiar with the local regulatory and legal context, could adapt more quickly and efficiently to the new rules than their U.S. counterparts.

On the other hand, the requirement for risk analysis and the restrictions imposed on certain AI applications may represent significant challenges for companies leading innovation in this field, such as Google and OpenAI. These companies, whose business models and technological advances are often based on the exploration of ethical and technological frontiers, could find European legislation an obstacle to their operations and experimentation in the region.

ue-eu acuerdo

Furthermore, by establishing a strict regulatory framework, the EU could be sending a signal to the market and investors about its commitment to a safe and ethical AI ecosystem. This could attract investment and talent to European companies, potentially boosting their growth and ability to compete globally. However, there is also a risk that overly strict regulation will stifle innovation and cause both European and foreign companies to move their research and development operations to regions with more permissive regulations.

My personal opinion

My considerations regarding this new regulation are:

  • The European Parliament has been in a suspicious hurry to regulate this issue. While it is true that it is necessary to take measures that decrease the risks related to AI such as those related to transparency, ethics, and bias in its algorithms, among others.
  • They prohibit the use of innovations that these technologies facilitate even though these same innovations are used by governments to perform, for example, facial recognition to control the population as happens in a good part of the world in the name of a supposed “security”.
  • AI can bring some enormous benefits to society that can be affected by this rule, such as:
    • Automation: Automates repetitive tasks, freeing up time for people to focus on more creative and strategic activities.
    • Accuracy: Reduces human error in tasks such as data analysis, medical diagnosis and quality control.
    • Efficiency: Optimizes processes, increases productivity and reduces costs in various sectors.
    • Innovation: Drives new discoveries and advances in areas such as medicine, science, and technology.
    • Well-being: Improving quality of life by offering solutions to problems such as climate change, poverty and disease.
  • This regulation could “disincentivize” major players such as OpenAI or Google to operate on European territory due to the limitations that the regulation decides to apply. This may lead to an increase in the competitive advantage of individuals and companies based in Europe.
  • Legislation lags far behind innovation. Add to this the creation of a “Regulatory Agency” possibly in the hands of politicians, and you have the makings of a perfect storm of futility to the detriment of European citizens. This, de facto, is a brake on innovation.
  • Exception for AI for “military use”: The regulation does not regulate AI for military use, which raises concerns about its potential impact on human rights and international security.
  • Lack of clarity in some concepts: The definition of some key concepts, such as “high risk” is still unclear, which may generate legal uncertainty….
Follow-up in some media
Summary of the regulation in 2 minutes

The legislative resolution of the European Parliament related to the proposal for a Regulation laying down harmonized rules on artificial intelligence, known as the “Artificial Intelligence Act”. This regulation seeks to improve the functioning of the internal market through a uniform legal framework for the development, placing on the market, putting into service and use of artificial intelligence systems in the European Union.

It focuses on promoting human-centered and trustworthy artificial intelligence, ensuring a high level of protection of health, safety, and fundamental rights.

Key aspects:

  • Objective of the Regulation: To establish a uniform legal framework for AI systems in the EU, promoting their safe, reliable, and human-centered use while ensuring the protection of health, safety, and fundamental rights.
  • Application of the Regulation: The regulation applies to all AI systems in the EU, with a special focus on high-risk systems, establishing uniform obligations for operators, and protecting general interests and individual rights.
  • Key Definitions: The document establishes clear definitions of terms such as “AI system”, “deployer responsible”, “biometric data” and others, providing a solid basis for regulation.
  • Specific Prohibitions: Certain practices in the use of AI are prohibited, such as subliminal manipulation and exploitation of vulnerabilities, as well as the use of AI systems for citizen scoring.
  • Use of AI in law enforcement: Strict limits are placed on the use of AI systems in law enforcement, particularly with regard to remote biometric identification.
  • Promotion of Innovation: The regulation seeks to balance the protection of rights and safety with support for innovation and technological development in the field of AI.

The entry into force ofhis Regulation shall apply from two years after the date of entry into force of this Regulation. Theentry into force of this law, with a few exceptions.transparency requirements for high-risk AI systems and codes of good practice for low-risk AI systems.the codes of good practice for low-risk AI systems, which will come into force in 2025. which will come into force in 2025.

The two-year transition period, in theory, should allow companies and organizations to adapt to the new requirements of the regulation.

During this period, the European Commission will issue guidelines and recommendations to assist companies in complying with the regulations… It scares me…

Have a good week!

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