Taiwan introduces its first AI draft bill

Taiwan has become the latest country to propose artificial intelligence (AI) regulations. In its first stab at policing the sector, the Taiwanese government focused on high-level regulations, including safety and data protection.

The National Science and Technology Council (NSTC) unveiled the draft proposals this week, with the public having until mid-September to submit feedback. NSTC is a cabinet-level agency of the Taiwanese government that focuses on research and development of science and emerging technology.

One key proposal is a national AI framework that would establish standards for labeling and disclosure from AI applications. This would promote safety and trustworthiness, which have been some of AI’s biggest challenges.

The bill also delves into AI risk mitigation. However, it’s also vague on this, proposing that the industry must be guided by clear rules to reduce risk for Taiwanese users. It drew parallels between its risk mitigation proposals and the AI Risk Management Framework, which the U.S. Department of Commerce established in 2023. This framework is just as vague, and most of its stipulations are voluntary, with authorities lacking any power to pursue violators.

Data privacy has been another significant challenge for AI. Taiwan’s bill proposes that the country’s data protection authorities be charged with ensuring AI firms don’t unnecessarily collect, process, or use citizens’ data to train their AI.

All these stipulations will only apply to AI applications that have been released to the public and will not impact projects under development or research to avoid stifling innovation.

NSTC acknowledged that its framework is insufficient to cover all the aspects of AI. To remedy this, it proposes that the government establish a more comprehensive framework to police the industry. This framework would outline specifics, such as the application of AI in industries such as insurance and finance.

This framework should also ensure that AI can’t be used to harm Taiwanese people or manipulate and mislead them. Bias, discrimination, false advertising, scams, and other harmful applications of AI must also be addressed.

A recent survey found that local companies predict that AI automation could cost nearly a third of Taiwanese citizens’ jobs. NSTC’s bill calls on the government to protect these vulnerable workers and offer them guidance on transitioning to other jobs.

While Taiwan’s AI industry is nowhere close to the size of mainland China, the U.S., and other regional leaders, it remains a critical cog of the AI wheel. It’s home to some of the largest producers of advanced chips—led by TSMC—with one report revealing that it accounts for 66% of the production of the world’s most advanced chips.

The AI regulation headache

Taiwan’s approach of vague high-level AI regulations mirrors the approach of most other countries as the world struggles to oversee the emerging technology. Asian countries, in particular, have been lax with their AI laws to ensure local companies grow and compete with Western rivals.

As it has done with most technology, the EU has been the most aggressive in regulating AI. Its AI Act is the most comprehensive globally, but AI founders have expressed concerns that it could stifle innovation and push startups to other regions.

“The AI Act is a good idea but I worry that it will make it very hard for deep tech entrepreneurs to find success in Europe,” says Andreas Cleve, whose AI health-tech startup Corti is based in Denmark.

Cleve told the Financial Times that compliance costs with the EU AI Act for a company of around 50 employees could run into six-figure sums.

“I worry about legislation that becomes hard to bear for a small company that can’t afford it. It’s a daunting task to raise cash and now you’ve had this tax imposed. You also need to spend time to understand it,” he stated.

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