Why The EU Is Falling Behind In The Global AI Race

Via OilPrice.com,

• The EU’s stringent regulations on data and technology are stifling AI innovation within the bloc.

• The UK, with a more flexible approach to AI development, could benefit from the EU’s regulatory overreach and become a global leader in AI.

• Former Italian Prime Minister Mario Draghi acknowledges the EU’s competitiveness gap but proposes solutions that may exacerbate the problem.

EU regulatory overreach has gone from a Brexiteer conspiracy theory and source of ridicule to something that  EU leaders themselves acknowledge and are trying to address. But when it comes to AI, they’re already behind, says James Price

If you’ve bought a plastic drinks bottle in recent months, you may have noticed a maddening change – the lid can  no longer be detached from the rest of the bottle. You may find this rather annoying; you may even pretend to yourself that you like the increase in spills and mess in order to help save the environment. Regardless, it represents one of the major regulation-led innovations emanating from the European Union.

At the same time, the United States has fostered companies that have created large language models like ChatGPT, self-driving cars, drones, commercial space walks, and many, many other things that I’m not smart enough to understand.

This shocking gap in competitiveness across Europe has, like many ideas, gone from a crazy Brexiteer conspiracy theory and source of ridicule to something that  EU leaders themselves acknowledge and are trying to address.

This has come to a head with the recent publication of former Italian Prime Minister Mario Draghi’s long-awaited report into the EU’s competitiveness gap. Whilst correctly diagnosing some of the problems, the remedies it offers are – inevitably – more European integration, government spending and decarbonisation. That means more expensive energy, less competition or experimentation between member states, and higher taxes. Good luck with that!

But Mr Draghi’s first lament in a piece he wrote on the report focuses on something even the layman knows is a potentially enormous growth area, artificial intelligence (AI). This new wellspring of technologies could prove to quite literally be a deus ex machina for the economic and governmental ills of the world, and there’s no reason why Europe shouldn’t be able to be a leader in it. 

Mr Draghi’s report literally proposes “making it easier for researchers to commercialise ideas”. But the EU has been blocking some of the biggest tech companies who are investing in AI from training its products on user data inside the bloc. This means less innovation, and products that are not as useful inside the EU as they are outside. 

At the same time, Thierry Breton, an EU Commissioner, decided that the major tech challenge in Europe was Elon Musk’s Twitter removing blue ticks from celebrities. Threatening to ban Twitter across the EU has at least seen Monsieur Breton quit his post after being told he would lose it.

Barmy EU priorities

These barmy EU priorities are proving another Brexiteer talking point that was called ‘crazy’ at the time: the idea that over time the UK could benefit from diverging from statist EU rules.

The UK Information Commissioner’s Office (ICO) has recently decided NOT to intervene to prevent user data training AI models in the UK. Partly thanks to the beefed-up guidance on regulators’ duties to promote growth, instituted by the Conservative government back in May, companies like Meta will be able to release and develop exciting new AI products that will benefit users in the UK, but will be absent across the Channel. 

This was such a divergence from the EU that Meta President of Global Affairs and former EU MEP (oh, and former Deputy Prime Minister) Sir Nick Clegg has acknowledged the deep damage the EU is doing to itself here.

Sir Nick is a serious man who has spent enough time amongst the geniuses of Silicon Valley to know which way the world is turning. He will also understand that the UK can be a world leader in these new techs, thanks to its university talent, access to capital markets and the sheer good luck of having Google Deepmind based here.

The potential benefits are enormous, and other countries are already stealing a march. When the UAE appointed a minister for AI in 2017 others laughed at it as a gimmick. They aren’t laughing now as the Gulf state pioneers all manner of new tech. 

There are some great European AI companies, from defence firms like Helsing in Germany to Mistral AI in France who are world-leaders, but they risk being left behind by the American primes because of the EU’s backwards take on regulation.

If you don’t trust politicians not to mess up a bottle of fizzy pop, don’t trust them not to strangle the world-changing, life-saving tech of AI.