U.S. Warns E.U.’s Landmark AI Policy Will Only Benefit Big Tech

The US warned the European Union that its proposed law to regulate artificial intelligence would favor companies with the resources to cover the costs of compliance while hurting smaller firms, according to previously undisclosed documents.

The US analysis focuses mostly on the European Parliament version of the AI Act, which includes rules on generative AI. Some rules in the parliament law are based on terms that are “vague or undefined,” according to the documents, which were obtained by Bloomberg News.

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The analysis is Washington’s most detailed position on the EU legislation that could set the tone for other countries writing rules for AI. One US concern is that the European Parliament focuses on how AI models are developed, whereas the US would prefer an approach that focuses on the risk involved in how these models are actually used.

The analysis warns that EU regulations risk “dampening the expected boost to productivity and potentially leading to a migration of jobs and investment to other markets.” 

The new rules would also likely hamper “investment in AI R&D and commercialization in the EU, limiting the competitiveness of European firms,” because training large language models is resource-intensive, it said.

The US State Department feedback, including a line-by-line edit of certain provisions in the law, was shared with European counterparts in recent weeks, according to people familiar with the matter who asked not to be identified discussing private documents. 

One of the people said the comments were offered in the spirit of cooperation and alignment of values. Some of the US concerns have been echoed by EU member countries in response to the European Parliament version, the person said. 

The State Department and the European Commission declined to comment.

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 US 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.

At the same time, Washington has given mixed messages to EU policymakers about its views on regulation. While the US pushed back when the commission first proposed the AI Act in 2021, some American officials have begun to view mandatory rules more favorably as AI developers and ethicists warn about the possible harms from the technology.

Aaron Cooper, head of global policy at BSA The Software Alliance, a trade group that has engaged with both US and EU officials regarding AI regulation, said it’s important for countries’ AI rules to agree on basics, including definitions. 

“The most important thing that the Biden administration can do is continue to have a good candid conversation with their European counterparts about what the objectives are for AI policy,” Cooper said.