The transatlantic AI divide

From: POLITICO's Digital Future Daily - Tuesday Jul 26,2022 08:11 pm
Presented by Comcast: How the next wave of technology is upending the global economy and its power structures
Jul 26, 2022 View in browser
 
POLITICO's Digital Future Daily newsletter logo

By Brendan Bordelon

Presented by Comcast

With help from Derek Robertson

150712_european_union_getty_1160.jpg

Getty Images

Washington and Brussels are both preparing for a future dominated by artificial intelligence — but first, they need to get out of each other’s way.

Tech regulators on both sides of the Atlantic hope to prevent a split on AI rules like one seen on data privacy, where regulators in Europe got out ahead of their U.S. counterparts and sparked all kinds of havoc that continue to threaten transatlantic data flows .

“There is a lot of interest to avoid having segmented approaches,” said Elham Tabassi, chief of staff in the Information Technology Laboratory at the National Institute of Standards and Technology. “It’s bad for the market. It’s bad for the economy.”

But regulators in the EU and U.S. are already taking different approaches to the multi-trillion-dollar transatlantic tech economy. The EU is plowing ahead with mandatory AI rules meant to safeguard privacy and civil rights while the U.S. focuses on voluntary guidelines.

And there’s another fundamental divide — the U.S. wants to promote ethical research and use of the technology while Europe focuses on potentially banning, restricting or auditing specific lines of code. Put another way: While Brussels worries AI tools might harm people, Washington worries the people developing or using those tools might harm people — and they’re crafting their rules accordingly.

Michael Nelson, a senior fellow in the Carnegie Endowment’s Technology and International Affairs Program, said the imbalance could cause U.S. tech companies to lose out on transatlantic business — and cause Europeans to miss new technological opportunities.

“You're going to take the most stringent requirements that might be needed for a medical application and apply it to these general purpose algorithms that are being used everywhere,” said Nelson. “That is just going to hold back everything.”

The two sides aren’t starting from opposite corners. Victoria Espinel, CEO of the Business Software Alliance and a member of the National AI Advisory Committee, noted Europe’s still-evolving AI Act and NIST’s incomplete guidelines both seek to weigh the relative risks of AI tools. In both regimes, riskier AI codes or use cases receive heightened scrutiny compared with those deemed low-risk. “That’s a very significant step,” Espinel told me.

But EU plans to directly regulate specific AI codes are spooking their U.S. counterparts. “One size fits all is bad,” said Tabassi. “If I use face recognition for law enforcement applications, it's a lot more risky than if I use face recognition for unlocking my phone.” Tabassi said Europe’s proposed rules lack the “context” required to effectively regulate AI. “You can’t just get one application and label high, or low, or medium risk,” she said.

The U.S. side also argues the European approach is impractical, given how AI tools operate.

“The whole point of machine learning is that you dump in a bunch of data and the code rewrites itself,” Nelson said. “If you somehow certify that the code is ethical, and then you run it and it rewrites itself, how do you ensure that it still meets your criteria?”

Nelson and others said EU regulators are increasingly reaching the same conclusion. And while Europe is unlikely to ever completely agree with the U.S. approach, there’s optimism the two sides will find enough common ground to avoid a privacy-style crackup.

Negotiators on the U.S.-EU Trade and Technology Council, which was announced to great fanfare last year, are attempting to find that common ground. They have their work cut out for them.

A message from Comcast:

Help Americans make the most of the Internet. Digital Navigators are an important part of broadband infrastructure. Learn why Comcast supports funding these guides who are teaching digital skills in communities across the country.

 
a very stable markup

Treasury Secretary Janet Yellen testifies during a Senate hearing.

Treasury Secretary Janet Yellen testifies during a Senate Finance Committee hearing to examine President Joe Biden's proposed budget request for fiscal year 2023, on Capitol Hill, Tuesday, June 7, 2022, in Washington. | Manuel Balce Ceneta/AP Photo

Two major developments in the crypto world are illustrating how both regulators and the industry itself might simply be moving too fast for lawmakers to catch up.

First, after reports last week that the House Financial Services committee was going to take up legislation regulating stablecoins, those plans appear to be on hold. POLITICO’s Sam Sutton reported for Pro s that Treasury Secretary Janet Yellen raised red flags around one of the proposed bill’s key provisions, arguing that crypto wallet providers should be forced to keep customers’ assets separate from the rest of its proprietary holdings.

Second, the SEC shook the industry to its core by classifying several Coinbase holdings as securities, as part of its insider trading case against one of the firm’s employees. Classifying crypto assets as securities would make them subject to the same regulations and disclosures as traditional financial products, completely upending an industry that’s entrenched itself with little federal oversight.In the case of the stablecoins, both crypto skeptics and traditional finance urged lawmakers to proceed with caution: The Independent Community Bankers of America sent a letter to the committee’s top members last week saying the markup was “premature” and pressing the committee to loop in industry, the SEC and the CFTC.

But as the SEC is already demonstrating, that very caution and deliberation is forcing lawmakers to be reactive instead of proactive when it comes to crypto. — Derek Robertson

byte's eyes

LAS VEGAS, NEVADA - JANUARY 08: The Pico Goblin VR headset is displayed at the Qualcomm booth during CES 2019 at the Las Vegas Convention Center on January 8, 2019 in Las Vegas, Nevada. CES, the world's largest annual consumer technology trade show, runs through January 11 and features about 4,500 exhibitors showing off their latest products and services to more than 180,000 attendees. (Photo by Justin Sullivan/Getty Images)

One of Pico's 2019-era headsets. | Getty Images

ByteDance, the Chinese tech giant behind TikTok, is increasingly signaling its desire to compete in an American-driven metaverse despite its home country’s skepticism of the tech.

Last week FCC filings revealed that the company’s hardware subsidiary, Pico, is planning to launch a new headset to compete with Meta’s planned flotilla of them the “Pico 4” and “Pico 4 Pro” (not to mention Apple’s long-awaited device ). The “pro” version will feature “additional eye tracking & additional face tracking function.” The company has also been hiring dozens of employees on the West Coast as it ramps up a planned content outlet, Pico Studios — part of a broader push to compete with American companies in the metaverse.

The filing for the new Pico also happened to coincide with reports that ByteDance has spent more than $2 million lobbying Congress last quarter, in response to lawmakers’ increased scrutiny of Chinese tech companies (and the seemingly imminent passage of a bill aimed squarely at competing with them). TikTok filed a letter to Republican senators reassuring them of their good intentions in June, promising that the company has “not provided U.S. user data to the CCP, nor would [it] if asked.” — Derek Robertson

 

A message from Comcast:

Advertisement Image

 
The Future In 5 Links

Stay in touch with the whole team: Ben Schreckinger ( bschreckinger@politico.com ); Derek Robertson ( drobertson@politico.com ); Konstantin Kakaes ( kkakaes@politico.com );  and Heidi Vogt ( hvogt@politico.com ). Follow us on Twitter @DigitalFuture .

If you’ve had this newsletter forwarded to you, you can sign up here . And read our mission statement here .

A message from Comcast:

To compete with the world in the 21st century, Americans must be connected to high-speed Internet at home.

Digital Navigators are an important part of broadband infrastructure. A new Boston Consulting Group study, supported by Comcast, discovered that Americans are finding better jobs, healthcare, and housing online after learning digital skills from these guides.

Learn how Digital Navigators are helping connect our nation – and why we must fund their efforts.

 
 

INTRODUCING POWER SWITCH: The energy landscape is profoundly transforming. Power Switch is a daily newsletter that unlocks the most important stories driving the energy sector and the political forces shaping critical decisions about your energy future, from production to storage, distribution to consumption. Don’t miss out on Power Switch, your guide to the politics of energy transformation in America and around the world. SUBSCRIBE TODAY .

 
 
 

Follow us on Twitter

Ben Schreckinger @SchreckReports

Derek Robertson @afternoondelete

Konstantin Kakaes @kkakaes

Heidi Vogt @HeidiVogt

 

Follow us

Follow us on Facebook Follow us on Twitter Follow us on Instagram Listen on Apple Podcast
 

To change your alert settings, please log in at https://www.politico.com/_login?base=https%3A%2F%2Fwww.politico.com/settings

This email was sent to by: POLITICO, LLC 1000 Wilson Blvd. Arlington, VA, 22209, USA

Please click here and follow the steps to .

More emails from POLITICO's Digital Future Daily

Jul 25,2022 08:01 pm - Monday

A prince and a politician walk into a…

Jul 22,2022 08:35 pm - Friday

Everything is awesome

Jul 21,2022 08:01 pm - Thursday

Technology vs. the nation-state

Jul 20,2022 08:11 pm - Wednesday

A comprehensive vision of the metaverse

Jul 19,2022 08:17 pm - Tuesday

How Elon Musk sped up the future

Jul 18,2022 08:29 pm - Monday

Crypto's next secrecy frontier