How Biden's New Executive Order on the Development and Use of Artificial Intelligence Could Affect Startups
On October 30, 2023, U.S. President Joe Biden issued an Executive Order on the safe development and use of artificial intelligence, designed to secure America's leadership in developing and governing artificial intelligence (AI). The Order establishes standards for AI safety and security, protects Americans' privacy, stands up for consumers and workers, and promotes innovation and competition.
Key points
Under the Order, developers of the most powerful AI systems must share their safety test results and other critical information with the government. In addition, the National Institute of Standards and Technology is to develop standards to ensure that AI tools are safe before their public release.
Furthermore, the Department of Commerce is to prepare guidance on labeling and watermarking AI-generated content to help consumers tell human-created content apart from machine-generated content.
Key principles and focus areas of the Executive Order
Overall, the Order rests on eight principles and priorities:
1) AI must be safe and secure, which requires robust, reliable, repeatable, and standardized evaluations of AI systems, as well as testing before they are put into use.
2) The United States should promote responsible innovation, competition, and collaboration through investment in education, training, and research, while addressing intellectual property rights and curbing unlawful collusion and monopolization of key assets and technologies.
3) Responsible development and use of AI require a commitment to supporting American workers through education and job training, as well as an understanding of AI's impact on the workforce and workers' rights.
4) AI policies must be consistent with advancing equity and civil rights.
5) The interests of Americans who increasingly use, interact with, or purchase AI and AI-enabled products in their daily lives must be protected.
6) Americans' privacy and civil liberties must be protected, which means that the collection, use, and retention of data must be lawful, secure, and privacy-preserving.
7) It is important to manage the risks arising from the federal government's own use of AI and to build up its internal capacity to regulate, govern, and support the responsible use of AI.
8) The federal government should lead the way to global societal, economic, and technological progress, including by engaging with international partners to develop a framework for managing AI risks, unlock AI's potential for good, and promote a common approach to shared challenges.
Impact of the Order on U.S. startups that develop and use AI
1. Compliance costs
The Order places heavy emphasis on safety, security, and ethical standards in AI. As a result, startups, which are often resource-constrained, may face significant spending on both technology and qualified personnel to meet these heightened standards.
2. Innovation and collaboration opportunities
On the other hand, the focus on responsible innovation may open up opportunities for startups and small companies that specialize in safety, ethics, and data privacy in AI.
3. Potential for funding and support
The Order encourages investment in AI education, training, research, and development. Startups, especially those in the early stages of AI research or building new AI-powered applications, may benefit from wider access to grants, government contracts, and partnerships.
Impact of the Executive Order on startups outside the U.S.
The signing of the Executive Order is a landmark event of great importance not only for American companies but also for companies abroad. The Order explicitly states that the United States will work with allies and partners abroad to build a strong international framework for governing the development and use of AI. For example, over the past several months the U.S. Administration has already held extensive consultations on AI governance, engaging with Australia, Brazil, Canada, Chile, the European Union, France, Germany, India, Israel, Italy, Japan, Kenya, Mexico, the Netherlands, New Zealand, Nigeria, the Philippines, Singapore, South Korea, the UAE, and the United Kingdom.
Such close cooperation suggests that the principles set by the United States may become a standard for other countries. For instance, certain prohibitions (such as those on AI algorithmic bias) may also be reflected in Kazakhstan's legislation. It is worth noting that Kazakhstan's government agencies are currently drafting an “AI Strategy” and a roadmap, and President Tokayev intends to personally oversee the creation of the AI system.
