On Oct 30, 2023, President Biden signed the Executive Order on AI, requiring AI developers and cloud providers to share safety tests and other crucial information with the government. It also instructs agencies to create safety standards, address cybersecurity and civil rights, and consider the impact of AI on the job market.
While the AI executive order aims to address legitimate concerns regarding the ethical and responsible use of AI, such order may inadvertently stifle innovation and hinder progress. It concentrates on potential risks associated with AI but overlooks its benefits in regard to healthcare, resource management, and the development of new industries. Focusing on potential misuse may create a climate of suspicion and harm the spirit of innovation needed for technological progress.
Biden’s AI Executive Order represents a departure from the traditional US approach to innovation and raises concerns about the influence of government on technological progress.
Biden’s AI Executive Order could be the worst policy mistake in decades
Biden’s AI executive order aims to ensure responsible AI development but risks dire economic consequences. One of the most troubling aspects of the act is its emphasis on regulating AI to avoid job displacement. While the fear that AI could eliminate millions of jobs is relatively recent, the concept according to which machines end up replacing human labor is age-old. This misconception spans both ordinary people and experts. Rather than fearing job loss to AI, one should rather acknowledge that new technologies often enable humans to handle more complex tasks.
According to a report by the Institute for the Future (IFTF), 85% of the jobs that today’s youth will be doing in 2030 have not yet been invented. Another report predicts that AI and robotics will actually enhance global employment in the following years, consistent with the historical pattern, following which technology drives job opportunities. The AI surge has diversified job types and led to increased hiring by companies. In fact, a recent Upwork study reveals that nearly 50% of business leaders intend to hire more freelancers and full-time employees to meet the increasing AI-induce need of competent, creative work; 64% of C-suite respondents express a strong preference to hire professionals across various domains due to the impact of generative AI.
Innovation transforms the employment landscape by reshaping how we work. While new technologies may displace certain occupations, they concurrently generate or enhance opportunities. Technological advancements make old tasks and skills obsolete, but at the same time make room for economic growth and new careers.
In particular, Biden’s order requires that AI companies report to the government details like model training, parameter weights, and safety testing results. While transparency in safety testing is understandable, the practical effect may deter tech companies from extensive testing, affect experimentation and – paradoxically – lead to lower safety. Furthermore, Biden’s AI executive order may impact the global competitiveness of the United States. Certain U.S. cloud providers will have to report about their foreign counterparts. This requirement may deter foreign collaboration. The European experience, where the EU regulatory activity has eventually driven tech companies offshore, has been ignored.
The U.S. favours the precautionary principle: innovation will suffer
Biden’s order is actually preparing the ground for a new centralized AI agency. Yet, agencies are unable to deal with a new revolutionary technology that positively impacts various critical sectors.
Companies and researchers typically explore diverse paths to develop innovative solutions. Yet, a mandatory one-size-fits-all approach likely restricts the spectrum of perspectives and strategies essential for robust and innovative AI applications. Rather than promoting an open and competitive market for AI solutions, the executive order will create an environment where bureaucratic preferences shape innovation and weaken the role of consumer needs and market forces.
The Act is already encountering resistance from multiple tech industry associations, including NetChoice and the Software & Information Industry Association, representing major AI and tech companies such as Amazon, Google, and Meta. They believe that the executive order is confusing, exceedingly broad, and that it may stifle innovation. Concerns include the impact on new market entrants and the extended influence of the federal government over American innovation. Another tech industry association, SIIA, also expresses concerns about the Act’s effect on America’s tech leadership. They all agree that Biden’s precautionary approach is not the right strategy. If President Bill Clinton had implemented an aggressive and comprehensive order back then, rather than choosing a lighter market approach, we might not have witnessed the internet revolution and the early stages of today’s AI era.
Photo by Cash Macanaya
