On October 30, the US Administration issued a 54 page detailed Executive Order setting forth a regulatory scheme to control the development, use, safety and accuracy of AI. This Order fulfills the promise contained in the July Administration release assuring the public that the leading US AI companies had agreed to cooperate and lead in such an effort.
The new order is so detailed that it does not lend itself to summary in a blog post; and no doubt there will be dense press and other coverage of its details. The over-all takeaways are these:
The Order reads like legislation. It is 54 pages long with four pages of definitions. It charges agencies of the Federal government to take affirmative action within specific time lines (often within 90 to 270 days) to assure the following: wide use of databases so that AI is less likely to be biased; establishment of incentives for small and emerging companies to focus on and be funded for focus on AI; protection of US security, infrastructure and personal information; specific focus on child protection; streamlining of patent standards and criteria for admission to the US of AI experts to drive innovation aiming at US primacy world-wide in AI development. Sections require protection of US workers, measuring negative impact on the workforce and training to obtain new job opportunities. Specific requirements are placed on specific US government individuals and agencies: cabinet heads of departments and others below cabinet rank.
A White House AI Council is established to monitor all of the above, consisting of 12 cabinet officers, the US Attorney General, and directors of key government agencies (NSF, OMB, etc.)
From a VC standpoint, there will no doubt be a plethora of companies seeking and obtaining government support in the race to develop and make safe the AI used by the government and by the economy generally. VCs will need to obtain sophisticated expertise in AI to sort through the contenders when making their “bets.”
From an overall viewpoint, moving away from the details, here are some things to watch:
This is a piece of legislation in the form of an executive order, granular and detailed and calling for long-term government action and funding. I believe it is structured in a way intended to move forward without Congressional review or approval. I never express legal opinions in these posts and I particularly offer no view as to whether this Order exceeds Presidential authority. Nor do I speculate as to the success of any challenge mounted to its provisions, although frankly I expect that the Order covers so much that there will be such challenges, particularly with respect to expenditures.
Moving from speculation into quicksand, I wonder how the Republican leadership will react. There is indeed much in the Order declaring a desire to make US business the world leader in AI, but there are many other elements that one might suspect do not fit squarely into current Republican leadership thinking: coordination with international standards; scope of protection of labor; focus on making sure that the AI landscape is sensitive to gender rights, DEI and civil rights generally. One branch of Republican thinking, in my personal opinion, tends to be adverse to strong activity by the Federal government in such matters.
And indeed and generally, this Order is a “big government initiative.” Persons adverse to strong governance of markets and favoring the shrinking of government and leaving things to corporate America will find much to make them nervous about the completeness of the program set forth in the Order. While it is unthinkable to have State-by-State regulation of AI, putting the Federal alternative on paper, as is done by the Order, does present a blueprint for huge Federal action and indeed regulation of myriad aspects of investment, business, labor and social policy.
I am quite sure that my law firm, Duane Morris, will be posting alerts from time to time about various aspects of government action driven by this Order. May I invite you to go onto our firm website to receive these updates? We have a robust practice group in AI, designed to keep our clients and friends updated on significant developments in law and regulation. http://www.duanemorris.com
(To repeat the obvious and for avoidance of doubt, the legal and political views and content of my posts are personal and do not reflect the views of Duane Morris, LLP.)