If the United States won't step up, the European Union is happy to do so. That was the message the EU parliament sent this week by enacting the world's first major Artificial Intelligence regulations.

The so-called EU AI Act rates AI technology based on risk level and implements restrictions based on threat level. If a technology is considered "unacceptable", it would be banned by the member states.

As the BBC adds, "The Act also creates provisions to tackle risks posed by the systems underpinning generative AI tools and chatbots such as OpenAI's ChatGPT.These would require producers of some so-called general-purpose AI systems, that can be harnessed for a range of tasks, to be transparent about the material used to train their models and to comply with EU copyright law."

The AI act is expected to begin implementation in May after the EU parliament's legislative session, and after "passing after passing final checks and receiving endorsement from the European Council" notes CNBC.

"The European Union now has the world's first hard coded AI law," Patrick Van Eecke, a partner at Cooley, told Reuters. "Other countries and regions are likely to use the AI Act as a blueprint, just as they did with the GDPR."

However, business interests are already voicing concern. "The need for extensive secondary legislation and guidelines raises significant questions about legal certainty and the law's interpretation in practice, which are crucial for investment decisions," said Marcus Beyrer of the lobbying group BusinessEurope. While Marco Pancini, Meta's head of EU affairs, noted: "It is critical we don't lose sight of AI's huge potential to foster European innovation and enable competition, and openness is key here."

And Emma Wright, a partner at law firm Harbottle & Lewis, told CNBC that "considering the pace of change in the technology — as shown with the launch of generative AI last year — a further complication could be that the EU AI Act quickly becomes outdated especially considering the timeframes for implementation.”

Schumer's Push

In the US, meanwhile, no meaningful legislation of AI has taken form. In the fall of 2023, the Biden Administration announced that it was beginning to consider AI regulation. Senate Majority Leader Chuck Schumer then personally took it upon himself to push for a bill. "While today’s AI Executive Order is a massive step forward, everyone agrees there is no substitute for Congressional action," Schumer said in October. "Congress must act, must take the next step to build upon, augment, and expand today’s Executive Order by the president, and we must do it through bipartisan legislation."

THE VERDICT:

Pioneering AI regulation may actually be a benefit to the EU rather than a hindrance to innovation. As the expression in US politics says: "As California goes, so goes the nation." The Golden State not only leads tech innovations, but leads their regulation. Could such a counter-intuitive move put Europe at the forefront of AI development?