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In the News: US Regulates AI; Chinese Financial Super-Regulator Created; and NVIDIA Stops Chinese Chip Shipments
November 02, 2023 | BY
Brian Chan &Krista LeeBiden's AI executive order lays the foundation for AI export control rules; New Chinese super-financial regulator takes power away from existing state institutions; and U.S. orders immediate halt to some AI chip shipments to China.
Biden Issues New Executive Order on AI
U.S. President Joe Biden signed an executive order on artificial intelligence (AI) as the U.S. strives to catch up with other jurisdictions in regulating AI. The executive order seeks to balance the needs of cutting-edge technology companies with national security and consumer rights. Creating an early set of guidelines that could be fortified by legislation in the future is the first step. In Biden's view, the government was late to address the risks of AI. The EU and China started the process earlier than the U.S. AI has the ability to accelerate cancer research, model the impacts of climate change, and improve public services. But it could also distort basic notions of truth with false images and provide a tool to criminals.
The order requires companies to share reports on safety tests of their AI models with the government. The regulation recommends but does not require photos, videos and audio developed by AI systems to be watermarked to show that they were created by AI. Furthermore, the U.S. recently restricted the export of high-performing chips to China to slow its ability to produce large language models. These chips facilitate the massing of data that is crucial to programs like ChatGPT, making them effective at answering questions quickly. Consistent with this, the new regulations will also require companies that provide cloud services to tell the government about their foreign users.
Michael Zolandz, Washington, DC Managing Partner and Chair, Federal Regulatory and Compliance, of Dentons, told CLP that "the U.S. has very few export controls around AI, and they relate primarily to the hardware rather than the actual algorithms. The AI Executive Order is focused on ensuring that the way that AI is deployed protects a series of things including privacy and use of large databases." He expects that this focus on AI will likely influence how CFIUS looks at inbound investment and how Commerce reviews outbound licensing in the future, but this is going to take some time to evolve. It will take time for CFIUS and other agencies to understand what the technology is capable of, and whether it falls within their jurisdiction to take action on. CFIUS cannot create new restrictions—they have to operate within the scope of what's currently in U.S. export control law.
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