Tech executives slam EU’s AI regulation over stifling innovation

Tech executives at over 160 firms have signed an open letter criticizing the European Union’s proposed legislation on artificial intelligence (AI).

The signatories to the open letter were drawn from technology companies dabbling in AI, including Meta (NASDAQ: META), OpenAI, Cellnex (NASDAQ: CLNXF), and French-based Mirakl. According to the letter, the executives claim that the EU rules could cause high compliance costs and unfair liability risks to firms experimenting with the technology.

In the wake of growing concerns, the EU parliament proposed a set of rules to govern AI usage with the aim of aligning the technology with existing privacy, safety, and transparency guidelines. The proposed rule prohibits real-time AI-based remote biometric identification while pushing for the clear labeling of AI-generated content.

The coalition pointed out that while the proposed legislation looks to protect investors, it has the downside of stifling innovation that could adversely affect the region’s technological sovereignty. It noted that tighter rules could trigger leading AI researchers to migrate to friendlier jurisdictions to continue innovating with the technology.

However, the EU believes its proposed rules are balanced to encourage a competitive environment for AI firms to thrive alongside the protection of investors.

“I am convinced they have not carefully read the text but have rather reacted on the stimulus of a few who have a vested interest in the topic,” said Dragos Tudorache, in defense of the EU rules.

Despite the claims of a level playing ground, several AI platforms have run into trouble with European regulators. After a series of collisions with authorities, OpenAI CEO Sam Altman remarked that his firm might be forced to leave the EU following a near blanket ban in Italy.

Bard, Google’s (NASDAQ: GOOGL) regenerative AI platform, saw its incursion into the EU halted in its tracks by the Irish Data Protection Commission (DPC) for failing to furnish the regulator with the necessary information required for a launch.

There’s time to soften the EU’s stance

At the moment, EU member states are expected to iron out the finer details of the proposed AI Act, but tech firms are within their rights to petition lawmakers to tone down their grip on the industry.

On June 30, Microsoft (NASDAQ: MSFT) President Brad Smith arrived in Europe to cross-pollinate ideas with regulators on the best ways to regulate AI. OpenAI’s CEO has previously undergone an extensive tour to interface with regulators regarding AI regulation, while critics are pushing for a moratorium on AI development.

On the other side of the divide, a coalition of consumer groups is urging governments to wade into AI regulation to prevent a disruption to Web3, finance, mass media, and the electoral process.

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