Also: A.I. productivity, First Republic layoffs, Disney cuts.
Good morning, Peter Vanham here, filling in for Alan.
For all the dire warnings on the dangers of A.I., there is remarkably little regulation underway in the U.S. The most notable initiative in the U.S. so far, the “A.I. Risk Management Framework 1.0” from the National Institute of Standards and Technology (NIST), only saw the light of day this January and to date remains “voluntary.”
The vacuum means the European Union may once again set the tone when its proposed A.I. Act is approved by parliament this spring. The legislation, in the works since 2021, is expected to be operational by the end of the year. Having the power of law, it will have direct implications for A.I. companies, which may need explicit “ex ante” approval to enter the market with “high-risk” A.I. applications or face outright bans.
If history is a guide, what happens in Brussels may well reverberate around the world. Already, the draft A.I. Act has reportedly inspired similar regulations in China. In the U.S., Senate Majority Leader Chuck Schumer (D–N.Y.) announced two weeks ago he had started working on his own proposal to legislate A.I. But with the EU likely far ahead, Europe may become the true arbiter.
It should come as no surprise, then, that American “Big Tech” firms such as Microsoft and Google have been lobbying EU MPs fiercely regarding the A.I. Act. One of the “most contentious” points of that lobbying, Time reports, is whether “general-purpose A.I.” such as ChatGPT (backed by Microsoft) and Bard (developed by Google) should be categorized as “high risk” A.I. applications.
Or, as Sampsa Samila, professor at IESE Business School specializing in A.I., told me over the phone this morning: “It’s hard to say what the real threat of A.I. is. The concern about all kinds of biases is real. But the worry about increasing market concentration in A.I. is too. Those that are lobbying for regulation are the same ones that stand to gain from their increased market power.”
Separately, make sure to check out the latest episode of Fortune‘s Leadership Next podcast, as Alan and his new co-host Michal Lev-Ram interview Stéphane Bancel, the founder and CEO of COVID-vaccine maker Moderna. The technology used in the COVID vaccine, Bancel says, has potential for cancer and H.I.V vaccines as well.
More news below.
Peter Vanham
peter.vanham@fortune.com
@petervanham
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A.I. use boosts productivity
A recent study from MIT and Stanford found that incorporating generative A.I. models into the workplace can lead to a significant increase in productivity, particularly for entry-level workers. Workers in the study who used these models were 13.8% more productive than those who didn't. Fortune
First Republic layoffs
First Republic Bank is cutting its workforce by up to 25% and taking measures to strengthen its financial position after its customer deposits dropped 41% to $104.5 billion in the first quarter. First Republic noted that outflows have slowed recently, with deposits decreasing by just 1.7% between the end of March and April 21. Bloomberg
Disney cuts: round 2
Disney began its second round of job cuts as part of its plan to eliminate 7,000 jobs this year. The latest reductions will take place at the company’s HQ as well as ESPN and bring the total number of cuts to 4,000. Bloomberg
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More Venture Capital firms prioritizing DEI Results from Deloitte’s latest VC Human Capital survey indicate “that the VC industry has made significant but somewhat inconsistent progress in increasing“ DEI. The survey also indicated that most firms have established or plan to establish specific DEI goals within the next six months. Explore tangible actions firms have taken and how leaders might accelerate this evolution. Read more.
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