What the European AI Act Means for You, AI Developer [Updated December 2023]

On October 30, 2023, the White House announced an Executive Order issued by President Joe Biden aimed at fostering a balanced approach toward the development and deployment of Artificial Intelligence (AI) to ensure it's safe, secure, and trustworthy. It acknowledges the potential of AI technologies in solving urgent societal challenges and enhancing prosperity, productivity, innovation, and security. However, the Executive Order highlights the potential adverse effects that an irresponsible use of artificial intelligence could have, such as fraud, discrimination, bias, misinformation, threats to national security, and the need for guardrails. The Order calls for a collective effort from the federal government (including the Department of Homeland Security, the Department of Health and Human Services, the Department of Energy, the Department of Commerce, and more), the private sector, academia, and civil society to mitigate these harms while maximizing the benefits of AI. Here are the three main guiding principles behind this Executive Order: Safety and security: The Order emphasizes the need for robust, reliable, repeatable, and standardized evaluations of AI systems. It mandates addressing security risks, including those related to biotechnology, cybersecurity, and critical infrastructure. The document also highlights the importance of testing, post-deployment monitoring, and effective labeling to ensure that AI systems are ethically developed, securely operated, and compliant with federal laws​. Responsible innovation: It encourages promoting responsible innovation, competition, and collaboration to maintain U.S. leadership in AI. The Order calls for investments in AI-related education, training, development, research, and tackling intellectual property issues. It also emphasizes creating a fair, open, and competitive AI ecosystem and marketplace, supporting small developers, and addressing potential risks from dominant firms' control over critical assets like semiconductors, computing power, cloud storage, and data​​. Supporting American workers: As AI creates new jobs and industries, the Order stresses adapting job training and education to support a diverse workforce. It advises against deploying AI in ways that undermine rights, worsen job quality, or cause harmful labor-force disruptions. The Order encourages building the next steps in AI development based on the views of workers, labor unions, educators, and employers to support responsible AI uses that improve workers' lives and augment human work. In subsequent sections of this article, we will examine the actions among the AI directives in this Executive Order. In the meantime, let’s explore how we got here. How did we get here? The History of AI Regulation in the United States of America President Biden's Executive Order on Safe, Secure, and Trustworthy Artificial Intelligence is the result of years of developing insights and responses to emerging technologies in the field of AI. In order to show how we came to this important turning point, this section will walk you through the path of AI regulation in the United States. Early Engagement, Regulating Open- and Closed-Source LLMs Navigating the spectrum between open and closed LLM systems is critical for effective AI policy. Striking the right balance will promote innovation and competition while managing the potential risks of AI. By 2024, the National Institute of Standards and Technology (NIST) under the U.S. Department of Commerce will determine whether they will allow the release of open model weights under public licenses. This, of course, is bound to stir up discussions surrounding treating open model weights as free speech and accusations of lobbying from big tech companies to protect their MOAT. As these LLM systems began permeating various sectors, the need for a regulatory framework became apparent. Policymakers grappling with the rapid advancements in AI models and tools started the conversation about balancing promoting US global leadership in AI with the risks to individuals, businesses, and national security. Legislative Efforts The early engagement translated into legislative action, with the USA’s House and Senate committees holding numerous hearings on AI. The hearings included big names like Elon Musk, CEO of SpaceX, Tesla, and X, formerly known as Twitter; Mark Zuckerberg, CEO of Meta; former Microsoft co-founder Bill Gates; and Sam Altman, CEO of OpenAI, the parent company of AI chatbot, ChatGPT. Biden Administration’s Early Steps In October 2022, the Biden administration issued a non-binding AI Bill of Rights, marking an early step towards delineating the government’s stance on governing automated systems, focusing on civil rights protection. Soon after, on September 12, several tech companies signed voluntary agreements to follow the rules President Biden set out for AI. This was the first step toward encouraging responsible AI use through partnerships with the private sector. SAFE Innovation—A Values-Based Framework and New Legislative Process Despite strong bipartisan interest, the challenge of passing comprehensive AI legislation continued, paving the way for the SAFE Innovation Framework proposal by Senate Majority Leader Chuck Schumer​. The Executive Order The culmination of these efforts and the evolving understanding of AI's impact led to the issuance of the Executive Order on Safe, Secure, and Trustworthy Artificial Intelligence. This Executive Order embodies a more structured approach to AI governance, reflecting the administration’s commitment to promoting responsible AI development and deployment while addressing the associated potential risks of AI. What are the Executive Order Directives? We have summarized the Executive Order Directives below so you can easily skim through and find the directives and the corresponding actions relevant to you. Directive 1: New Standards for AI Safety and Security Actions: Require developers to share safety test results with the U.S. government. Develop standards and tools to ensure AI systems are safe and secure. Protect against AI-enabled risks to national security and public health. Establish strong standards for biological synthesis screening. Directive 2: Protecting Americans’ Privacy Actions: Prioritize federal support for privacy-preserving techniques in AI. Strengthen privacy-preserving research and technologies. Evaluate how agencies collect and use commercially available data. Develop guidelines for federal agencies to evaluate privacy-preserving techniques. Directive 3: Advancing Equity and Civil Rights Actions: Offer advice to stop AI programs from making discrimination worse. Address algorithmic discrimination through training and coordination. Ensure fairness in the criminal justice system's use of AI. Directive 4: Standing Up for Consumers, Patients, and Students Actions: Make advances in the responsible use of AI in healthcare. Shape AI’s potential in education. Protect consumers and patients while ensuring AI benefits. Directive 5: Promoting Innovation and Competition Actions: Catalyze AI research and provide grants in vital areas. Promote a fair and competitive AI ecosystem. Streamline visa criteria for skilled immigrants. Directive 6: Supporting Workers Actions: Develop principles and best practices for worker protection. Produce a report on AI’s labor-market impacts. Directive 7: Advancing American Leadership Abroad Actions: Expand collaborations on AI at bilateral, multilateral, and multistakeholder levels. Accelerate the development of AI standards with international partners. Promote responsible AI development abroad. Directive 8: Ensuring Responsible and Effective Government Use of AI Actions: Issue guidance for agencies’ AI use. Streamline AI product and service acquisition. Accelerate the hiring of AI professionals in government. Now that we've discussed the key directives of the US Executive Order on AI, let's compare and contrast them with the European Union's approach to AI regulation, known as the EU Artificial Intelligence Act (AI Act). US Executive Order on Safe, Secure, and Trustworthy AI vs European Union AI Act In the table below, we present a comparative overview of the key aspects and focus areas of the US Executive Order on Safe, Secure, and Trustworthy AI and the EU Artificial Intelligence Act (AI Act). Read more about the takes on “Proposed AI Regulation: EU AI Act, UK's Pro-Innovation, US AI Bill of Rights” from Encord’s co-founder and president. As you saw in the comparison, while both regulations aim to foster a safe and responsible AI ecosystem, they approach AI governance from slightly different vantage points, reflecting the distinct priorities and regulatory philosophies of the US and the EU. What does the European AI Act mean for you, an AI developer? Learn more from this article by Ulrik Stig Hansen, Encord’s co-founder and president. Conclusion Increased involvement from policymakers, legislative efforts, and joint initiatives between the public and private sectors have all contributed to the current AI regulatory landscape. The issuance of the Executive Order represents a significant milestone in the ongoing journey towards establishing a robust framework for AI governance in the U.S. aimed at harnessing the benefits of AI while mitigating its potential perils. But will regulations stifle the efforts of open-source AI? Or would it encourage an ecosystem of open innovation while regulating the risks at the application layer? In this article, you learned about the evolution of AI regulation in the U.S., focusing on key legislative efforts, the Biden Administration's early steps towards AI governance, and the collaborative initiatives that marked the journey towards the recent Executive Order. We talked about how AI was regulated, which led to the Executive Order on Safe, Secure, and Trustworthy Artificial Intelligence. These included actions taken by lawmakers, tech companies making voluntary commitments, and the release of frameworks based on values like the SAFE Innovation Framework. Finally, we compared different aspects of the directives to the proposed European Union AI Act, where you saw clearly different priorities and regulatory philosophies between the United States Congress and the European Parliament. Get access to our new AI Act Learning Pack, which includes all the key resources you need to ensure forward compatibility.

Should AI be regulated? How might governments attempt to regulate AI? What would regulation mean for AI startups, scaleups, and tech giants supporting and innovating in the AI sector? While humanity has not developed artificial intelligence that can unequivocally pass the Turing test yet, these fears are not unfounded.  We don’t have AIs on the same level as Ian M. Bank’s ships “Minds” in the Culture series or Alastair Reynold's “Mechanism” in the Blue Remembered Earth series. Or the “SI” in Peter F. Hamilton’s series of books about a space-faring, wormhole-connected human society known as The Commonwealth.  Discussions and debates around AI regulation have gained significant traction recently. Governments, regulatory bodies, and policymakers around the world are grappling with the challenges and potential risks associated with the inevitable widespread adoption of artificial intelligence.  There has been considerable talk and speculation in the media, regulatory bodies, and political leaders at every level recently about proposed AI regulations across the EU, UK, US, and worldwide. As a result, governments are moving fast to propose regulations and new laws to govern the development and use of Artificial Intelligence.. It is worth noting the stark contrast in the great sense of urgency for adopting AI regulation compared to slow progress  of cryptocurrency regulations. It's a evident that lawmakers’ see AI as a potential threat to human society, the economy, and environment. Let’s dive into why governments are moving quickly, what regulation means for the AI sector, some of the challenges, and the proposed regulations thus far.  Public Discourse around AI Regulation There has been significant pressure from prominent figures in the industry to get AI regulation right.  On May 30, 2023, hundreds of, leading AI experts, including Sam Altman, CEO of OpenAI, and Microsoft Founder, Bill Gates, signed the following Statement of AI Risk: “Mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war.”  This declaration is not without precedent: In 2015, Elon Musk, Professor Stephen Hawking and numerous others met for an AI ethics conference. During the conference, it was agreed that an “uncontrolled hyper-leap in the cognitive ability of AI . . . could one day spell doom for the human race.”  The sentiment is best summed up by what the Future of Life Institute published in March 2023: “Powerful AI systems should be developed only once we are confident that their effects will be positive and their risks will be manageable.”  In theory, OpenAI CEO Sam Altman agrees: “At some point, it may be important to get independent review before starting to train future systems, and for the most advanced efforts to agree to limit the rate of growth of compute used for creating new models.” Source Google’s ‘Godfather of AI’, Geoffrey Hinton, quit in May 2023 over fears the industry and governments still aren’t moving fast enough to contain the risks posed by unregulated AI systems. Hinton is particularly  fearful of “bad actors”, such as Russia, China, North Korea, Iran, and global terrorist organizations using AI to attack Western democracies.  Around the same time, Elon Musk warned Google’s co-founders that they are “not taking AI safety seriously enough”. Despite Musk’s involvement in co-founding OpenAI and benefiting from AI advancements  in his other businesses such as Tesla and SpaceX, he has been increasingly vocal about the dangers of AI recently.  Why governments are moving quickly to regulate AI In short, governments are moving quickly because AI technologies are moving incredibly fast.  There are several considerations that are drawing particular attention:  Economic Disruption: The potential eradication of millions of jobs through the automation of numerous professions could cause economic disruption.  Security Risks: The increased reliance on AI systems also introduces new security risks. Bad actors could use AI for automated cyberattacks, even giving AI systems control over aerial weapons, such as drones, chemical weapons, and nuclear warheads.  Misinformation: In the wrong hands, generative AI could be used to spread misinformation and could be used to manipulate populations, economies, and political debates if regulations aren’t applied for how this technology is used. Ethical Concerns: There are worries about the ethical implications of AI, particularly regarding the use of AI in military applications and surveillance. The lack of transparency in AI processes is a concern as it can lead to biased outcomes. As the Center for AI Safety states: “AI systems are trained using measurable objectives, which may only be indirect proxies for what we value.”  Lack of Control:  Some people fear that AI systems may become too autonomous and surpass human intelligence. This would result in loss of control over their actions and decision making.  There are numerous other concerns with advancements in AI technologies and applications.  How businesses, academia, and governments influence the way AI evolves and iterates now will directly impact the way AI shapes humanity, the economy, and the environment for years to come. What regulation means for the AI sector Every industry that impacts society in significant ways has regulatory oversight, laws that govern the use of technology, and safeguards to prevent risks to life, health, the economy, or the environment. Nuclear, healthcare, finance, and communications are some of the most heavily regulated sectors.  The challenge is finding balance. Governments don’t want to prevent innovation, especially in the technology sector. Innovation creates jobs, economic growth, and new tax revenues for governments.  Other challenges are more practical. Such as working out how much money and how many people will it take to regulate AI businesses? AI is advancing fast. New models and developments are emerging every week. How can governments handle a fast-moving volume of applications and models to test, and what tests can be applied to determine whether an AI is safe or not?  These are some of the many questions AI experts, industry leaders, and lawmakers’ are wrestling with to find the best ways to regulate the sector without negatively impacting it.  OpenAI CEO Sam Altman has been amongst the most vocal in calling for laws to regulate the AI industry. In a US congressional hearing, Altman said “We think it can be a printing press moment. We have to work together to make it so.” He called for the creation of regulatory bodies for AI, similar to the Food and Drug Administration (FDA).  As for what this means in practice, the AI industry, businesses that use AI tools, and consumers will have to see what laws are passed before government agencies are established and put them into practice. In reality, this is a process that normally takes several years.  The FDA's process for AI developers to understand whether their model needs FDA approval Assuming governments take this seriously, we might see legislation move more quickly than attempts to regulate other technological advances, such as crypto. AI is already impacting society, businesses, and the economy faster, so for that reason political leaders are accelerating the legislative process.  We are already seeing swift movement in the drafting of AI laws. Now let’s look at what the US, European, and British governments are doing about this . . .  What AI Regulations have been proposed?   Let’s dive into the AI regulation that has been proposed in the EU, UK, US, and around the world.  European Union’s Artificial Intelligence Act (AI Act)  The EU is proposing a “risk-based approach” to ensure that any AI system considered “a clear threat to the safety, livelihoods and rights of people will be banned.”  The AI Act is part of a wider, coordinated approach to AI development and uses across Europe, including a Coordinated Plan on AI.  A key part of this proposal is the  conformity assessment, which will be required before the AI system enters the market. Source This way, the EU will  assess the risk factor for every  commercial AI model active in Europe. Depending on the outcome of the assessment, an AI system could be banned or placed  into an EU-wide database and granted a CE mark to show security compliance. The EU notes that: “the vast majority of AI systems currently used in the EU fall into this [minimal and no risk] category.”  In the US, the FDA is already processing and regulating hundreds of AI models for healthcare, so we could see a similar process in the EU with a broader range of applications.   UK Government’s Pro-Innovation Policy Paper   The UK government isn’t being as proactive. The British Department for Science, Innovation and Technology has published: AI regulation: a pro-innovation approach – policy proposals. As the name implies, the British government aims to demonstrate it’s pro-business and pro-innovation. Speaking at London Tech Week, British Prime Minister Rishi Sunak said “I want to make the UK not just the intellectual home, but the geographical home of global AI safety regulation.” However, so far the UK approach to AI regulation isn’t as robust as the EU or US. No new laws or regulatory bodies are being created. Instead, the UK is passing on the responsibility to the Information Commissioner’s Office (ICO) and Financial Conduct Authority (FCA). US Government: President Biden’s administration’s proposal: AI Bill of Rights  In the US, The National Telecommunications and Information Administration (NTIA), a Commerce Department agency, and the White House Office of Science and Technology Policy put together recommendations that President Biden’s administration is acting on.   The result is a blueprint for a proposed AI Bill of Rights on the table. The aim of this legislation, on a federal and state level, is to protect “the public’s rights, opportunities, or access to critical needs.”  At the heart of this proposed AI Bill of Rights are five public and economic safeguards:  Protection from unsafe or ineffective systems: AI “Systems should undergo pre-deployment testing, risk identification, and mitigation, and ongoing monitoring that demonstrate they are safe and effective based on their intended use, mitigation of unsafe outcomes including those beyond the intended use, and adherence to domain-specific standards.” Protection from algorithmic discrimination: AI systems should be “used and designed in an equitable way.”  Protection from abusive data practices: Building on current data protection legislation to ensure greater security and agency over how data is used and processed by AI systems.  Protection from AI systems taking action or decisions without people understanding how or why: In other words, transparency on AI decision-making processes.  Protection from AI having the final say, with opt-out and human remedies to overrule AI systems.  Source Alongside the White House’s proposal, the US Senate is holding hearings and deliberating on how to regulate AI.  No regulations have been finalized. However, recent AI developments ⏤ especially the prominence of ChatGPT ⏤ firmly put AI regulation on the legislative agenda at every level of government.  Around the world, several other countries are also taking AI regulation seriously. China and Japan have both taken a human-centric and safety-first approach. Japan has a vast IT industry, and AI development is accelerating, so they’ve adopted OECD AI Principles that align with their plans for “Society 5.0.” Brazil, Canada, and several other countries are also drafting AI legislation. India hasn’t made any formal moves so far. However, given the size of the Indian tech sector, it’s likely that regulation will soon have to be considered. There’s no global approach to AI regulation so far. But that might be something we see developing in time, especially since AI can and will impact everyone in some way.   Key Takeaways: What to expect in the short-term?  Government legislation, passing laws and regulations, establishing agencies, and allocating budgets take time. In most cases, a proposal can take several years to become a law and then have an agency to oversee and coordinate a legislative mandate.  However, it is worth getting familiar with what the EU and US are proposing so your organization is ready. It’s even more important for those already operating in regulated sectors, such as healthcare, weapons, transport, and financial services. Although we aren’t likely to see any sudden changes, lawmakers are moving quicker than normal, so it’s worth being prepared.  Ready to improve the performance, security, and audit trails of your active learning for computer vision and AI projects?  Sign-up for an Encord Free Trial: The Active Learning Platform for Computer Vision, used by the world’s leading computer vision teams.  AI-assisted labeling, model training & diagnostics, find & fix dataset errors and biases, all in one collaborative active learning platform, to get to production AI faster. Try Encord for Free Today.  Want to stay updated? Follow us on Twitter and LinkedIn for more content on computer vision, training data, and active learning. Join our Discord channel to chat and connect.