As regulatory and governance structures around artificial intelligence (AI) continue to develop worldwide, the European Union (EU) and the United States are establishing their own unique approaches. Despite the independent progress of each jurisdiction, businesses globally may need to align with both rather than choosing sides.
Historically, the EU has adopted a comprehensive, prescriptive approach to tech regulation, largely informed by strong traditions of upholding fundamental rights through legislation. Contrastingly, the US prefers a federated approach to tech regulation which incorporates federal, state, and local laws, sector-specific standards, and market needs into a contemporaneous regulatory framework.
Both the EU and the US have tailored their AI regulations in line with their respective historical approaches. The differences lie in their application, the structure of the regulation, its focus, and enforcement.
The EU AI Act establishes binding, comprehensive rules applicable to businesses throughout the AI value chain. On the other hand, President Joe Biden’s executive order, while not as legally forceful, issues broad and detailed mandates for various federal agencies which may ultimately result in regulation of similar constituents.
The new EU regulation follows a risk-based approach, aiming to address pressing AI risks while fostering innovation. The Biden administration’s executive order focuses on maintaining US leadership in AI by developing best practices, guidelines, and laws across a range of areas.
From a global perspective, these decisions have far-reaching effects. In both approaches, there are clauses which will impact non-domestic entities. For instance, the EU AI Act’s rules will apply to a US provider servicing an AI system in the EU, and the executive order’s applicability to non-US companies will vary based on each individual agency’s regulations.
Looking forward, businesses and regulatory authorities globally should factor these developments into their strategies. Regardless of the traditional debate over whether the EU or the US has led in AI development or regulation, what now matters is keeping abreast of the evolving AI regulations in both regions.
Original article available at Bloomberg Law. Written by Devika Kornbacher and Dessislava Savova.