Inside the global battle for AI

How the next wave of technology is upending the global economy and its power structures

Mar 26, 2024 View in browser   By POLITICO Staff Photo illustration by Raphaël Vicenzi for POLITICO Today POLITICO published a sweeping, transatlantic look inside the global efforts to regulate AI, from reporters Mark Scott, Gian Volpicelli, Mohar Chatterjee, Vincent Manancourt, Clothilde Goujard and Brendan Bordelon. Below is an excerpt of the story, readable in its entirety here, focusing on the competing, sometimes fraught efforts to set a global standard for AI regulation that played out in Japan last year, just ahead of the Bletchley AI policy conference in the United Kingdom. A month before the conference in the English rain, policymakers had been frantically trying to make progress on the other side of the world. It was October, and Věra Jourová stepped off her 16-hour flight from Brussels to Japan exhausted. The Czech politician was only a few weeks into her new role as the EU’s top tech envoy, and her first international assignment would not be easy. Jourová’s mission was to sell Europe’s AI rulebook at a G7 meeting where Western leaders had gathered to try to design new global standards for the most advanced form of this technology, known as “generative AI,” the powerful development behind ChatGPT and rival tools. Brussels’ approach is enshrined in the EU’s Artificial Intelligence Act, the world’s first attempt at binding legislation on the issue. Unlike the stance favored by the U.S., the EU’s vision includes bans on the most invasive forms of the technology and strict rules requiring companies like Google and Microsoft to be more open about how they design AI-based products. “Generative AI invaded our lives so quickly and we need something fast,” Jourová told POLITICO after taking the two-hour bullet train from Tokyo to Kyoto for the summit. At the three-day meeting in Japan, Nathaniel Fick had a rival pitch. As Joe Biden’s top digital diplomat, Fick, a former tech executive, proposed no bans or strict requirements. Instead, he pushed for a lighter-touch regime based mostly on voluntary commitments from industry and existing domestic laws. “People can expect the United States to weave in AI policy issues in everything we do,” Fick told POLITICO after the Kyoto summit concluded. “The frameworks, the codes, the principles we develop will become the basis for action.” In dueling meetings with G7 policymakers, tech company executives and other influential figures, Jourová and Fick made their cases. For the EU’s Jourová, the pitch was simple. Brussels had already marked itself out as the West’s digital police officer, with a flurry of regulations on everything from protecting consumers’ privacy to taming social media. The summit timetable was packed, with little downtime beyond some snatched cigarette breaks and rushed lunches in the cafeteria. Jourová argued that only Europe could deliver the necessary rigor. The EU, she said, could hit companies with blockbuster fines and ban the most invasive forms of AI — such as social scoring, which are complex algorithms tracking people’s movements, infamously used in China. “She came with a plan, and that was to convince us Europe’s rules were the only game in town,” said one of the people who met Jourová. Another official from a G7 country said Europe’s digital chief dismissed Washington’s alternative proposal for its lack of binding legislation. Fick’s counteroffensive relied on America’s undisputed position as the world’s powerhouse of AI development. A political stalemate on Capitol Hill means no comprehensive legislation from Washington is likely to come anytime soon. But the White House has already made a flurry of announcements. Last July, the Biden administration secured voluntary commitments from leading tech giants like Amazon to make AI safer. Then Biden issued an executive order, announced on Oct. 30, which empowered federal agencies to act. Fick’s pitch included criticizing Brussels’ legislation for imposing too many regulatory burdens on businesses, compared to Washington’s willingness to allow companies to innovate, according to two individuals who met Fick in Japan. “The message was clear,” said another Western diplomat who attended the Kyoto G7 summit. “Washington wasn’t going to let Brussels get its way.” Read the full story here.   YOUR GUIDE TO EMPIRE STATE POLITICS: From the newsroom that doesn’t sleep, POLITICO's New York Playbook is the ultimate guide for power players navigating the intricate landscape of Empire State politics. Stay ahead of the curve with the latest and most important stories from Albany, New York City and around the state, with in-depth, original reporting to stay ahead of policy trends and political developments. Subscribe now to keep up with the daily hustle and bustle of NY politics.      the 'who cares' factor Okay, but what if… none of this actually matters? That might be a bit crude of a reduction of the argument that tech analyst Benedict Evans made in a recent essay, but he does pose a confrontational question for the POLITICO reader by titling it “Who cares about tech regulation?” “Anything I write about regulation gets the least engagement,” Evans writes, saying he hears the same from fellow writers and journalists everywhere. “One could … suggest that most of the laws and rules that are being discussed simply won’t affect most people in tech very much at all, nor most tech companies.” Evans goes on to argue that most of the tech regulation being discussed right now has deeply limited applications even within the biggest companies with high-profile regulatory cases in front of them like Meta or Google. It's a familiar argument, and one that flatters tech fans: the industry is so disruptive, so dynamic, that it's just going to charge forward regardless. Maybe so. But we cover policy a lot here, and we've seen the nets get tighter while tech companies start to pay attention (and spend money); I hear from as many readers in the private sector as the public. It's true that tech employees’ day jobs might not change overnight because of an FTC ruling or piece of children’s safety regulation, but the overall environment is more like steering a cruise ship — the scenery doesn’t change very fast, but eventually you’ll find yourself somewhere new. built in dresden Germany is putting forward some pitched competition in the global race to manufacture microchips. POLITICO’s Pieter Haeck reported today for Pro subscribers on the flurry of chip manufacturing activity in the city of Dresden, where roughly 76,000 people now work in microelectronics and IT. That number is expected to rise above 100,000 by the 2030s thanks to a campaign by the local government and the ongoing global chips race. “People around here know what a clean room is, they have seen the suits and they have a father or mother who are working there,” said Martin Landgraf, a coordinator at the German research center Fraunhofer, which has multiple branches in the region. “Students get more interested, it’s more likely they also choose that job.” As other countries around the world increase their own subsidy programs for chip manufacturing, however, Dresden faces increased competition — and one analyst cited Germany’s cutting back on Russian gas purchases as a “costly” decision that could further hamper its industrial base. Tweet of the Day The Future in 5 links A human rights activist’s much-touted startup is starting to look a bit flimsy. Portugal issued a three-month ban on Worldcoin, citing risks to children’s data. Nvidia is investing $4 billion in West Lafayette, Indiana. A CEO says AI will increase electricity demand in the U.K. by 500 percent. Read the inside story of the Google engineers behind the “Transformers” paper. Stay in touch with the whole team: Derek Robertson (drobertson@politico.com); Mohar Chatterjee (mchatterjee@politico.com); Steve Heuser (sheuser@politico.com); Nate Robson (nrobson@politico.com); Daniella Cheslow (dcheslow@politico.com); and Christine Mui (cmui@politico.com). If you’ve had this newsletter forwarded to you, you can sign up and read our mission statement at the links provided.   SUBSCRIBE TO GLOBAL PLAYBOOK: Don’t miss out on POLITICO’s Global Playbook, the newsletter taking you inside pivotal discussions at the most influential gatherings in the world, including WEF in Davos, Milken Global in Beverly Hills, to UNGA in NYC and many more. Suzanne Lynch delivers the world's elite and influential moments directly to you. Stay in the global loop. 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