ITIF-《人工智能法》将让欧洲付出多少代价？（英）-2021.7-18页_922kb

Summary of the Artificial Intelligence Act and Its Economic Impact on Europe

Core Content

The European Commission's proposed Artificial Intelligence Act (AIA) aims to establish the world's most restrictive AI regulation. If implemented, it will significantly impact the development and use of AI in Europe, with substantial financial costs and economic consequences.

The AIA categorizes AI systems into three risk levels: prohibited, high-risk, and limited risk. It bans certain AI applications, such as subliminal psychological manipulation and real-time biometric surveillance by public authorities. High-risk AI includes applications in education, finance, health, IT, and critical infrastructure, among others. These systems must meet strict compliance requirements, including the use of complete and error-free datasets, transparent and auditable systems, human oversight, and robust security measures.

Main Points

Financial Costs

• Total cost over five years: The AIA is estimated to cost the European economy €31 billion.
• Annual cost by 2025: The act will cost €10.9 billion per year by 2025.
• SME compliance costs: A small business with a turnover of €10 million could face compliance costs of up to €400,000, which may reduce profits by 40%.
• Enterprise compliance costs: Large enterprises may face compliance costs similar to GDPR, with some spending up to €1 million for one high-risk AI product.

Investment Impact

• Current AI adoption: Only 7% of European non-financial businesses use AI.
• Digital Decade target: The EU aims for 75% of businesses to use AI by 2030, which would require a massive increase in AI investment.
• Investment projections: Without the AIA, AI investment in the EU is projected to grow from €15.9 billion in 2021 to €68 billion in 2025.
• With the AIA: AI investment is expected to be €13.3 billion in 2021 and €56.2 billion in 2025, showing a significant shortfall.

Compliance Burden

• The AIA imposes technical and compliance obligations on developers and users of high-risk AI systems.
• These include building quality management systems, maintaining technical documentation, conducting conformity assessments, and ongoing monitoring.
• The law's complexity and unclear responsibilities between developers and users may discourage innovation and reduce SME participation.

Key Implications

Economic Competitiveness

• The AIA may hinder Europe's competitiveness in the global AI race, as the EU lags behind the US and China in AI development and investment.
• AI is a general-purpose technology, and the AIA could slow down digital transformation and reduce productivity growth.

Investment and Innovation

• The AIA may deter investment into AI startups due to high compliance costs.
• It could lead to a brain drain of European entrepreneurs moving to regions with fewer regulatory hurdles.
• The regulatory burden is expected to increase the cost of capital for AI investments in Europe, further reducing the appeal of the EU as a hub for innovation.

Market Concentration

• The AIA is likely to increase market concentration, favoring large incumbents over small and new entrants.
• This could reduce innovation and increase the dominance of foreign tech giants in Europe.

Unquantifiable Costs

• The AIA may discourage investment in AI startups and slow down the digitization of the economy.
• It could reduce the availability of private venture funding for AI initiatives.
• These unquantifiable costs may further reduce the EU's growth potential and digital competitiveness.

Conclusion

The AIA, while intended to protect fundamental rights and ensure AI safety, is likely to create a chilling effect on AI investment and innovation in Europe. The compliance costs, regulatory complexity, and increased overhead may undermine the EU's digital transformation and reduce its competitiveness in the global AI landscape. The law's impact may be even greater than the €31 billion in direct costs, as it may also discourage innovation and lead to a brain drain of entrepreneurs and investors.

Figures

• Figure 1: Projected AI investment shortfall caused by the AIA.
• Figure 2: Location of the world's largest 100 companies by market capitalization, 2000 to 2021.
• Figure 3: Portion of EU GDP that falls under the "high risk" provisions of the AIA.
• Figure 4: Amount of IT spending by European businesses covered by the AIA.
• Figure 5: Europe lags behind the US and China on information technology R&D spending.

Appendix

AI Investment Projections

AIA Annual Cost

About the Author

Benjamin Mueller is a senior policy analyst at the Center for Data Innovation, focusing on AI and technology governance. He previously worked as the chief of staff at a financial technology company in London. He studied Politics, Philosophy and Economics at the University of Oxford and completed his PhD in International Relations at the London School of Economics.

About the Center for Data Innovation

The Center for Data Innovation is a global think tank studying the intersection of data, technology, and public policy. It promotes pragmatic public policies to maximize the benefits of data-driven innovation. The Center is part of the nonprofit, nonpartisan Information Technology and Innovation Foundation (ITIF).

Contact Information

• Email: info@datainnovation.org
• Website: datainnovation.org