To Regulate or Not To Regulate, That Is The Question
European countries push back on the upcoming EU AI Act to avoid stifling innovation in support of domestic AI companies.
I don’t know about you but after the tension from last week I now feel completely depleted and uninspired by the return to business as usual. I admit that there is comfort in predictability, but oh the thrill of the rolling headlines and not knowing what would happen next!
As the OpenAI drama seems to be behind us now, at least for the time being, we can confirm that:
Sam Altman, who was CEO, is back as CEO
Greg Brockman, who was President, is back as the company's President
Mira Murati, who was CTO and the briefest interim CEO, is back as CTO
Microsoft, who has a 49% stake on OpenAI, now sits on the board and still has a 49% stake in the company
If last week I drew comparisons between Altman and Cesare Borgia, the real inspiration behind Machiaveli’s The Prince, this week I must resort to another Italian classic in light of the return of Altman, Brockman, Murati to OpenAI and the confirmation of the power Microsoft holds.
This time is the turn of Il Gattopardo (The Leopard) by Giuseppe Tomasi di Lampedusa, a superb novel about the slow decline of Sicily's nobility and its loss of power in the period leading to the unification of Italy and the creation of a new political regime and centralised government.
Besides its literary merits, the novel is famous for the following sentence: “Everything must change for everything to remain the same”, which the character of Tancredi says to his uncle Prince Fabrizio, an eminent member of the Sicilian aristocracy, when he understands that they need to seize the opportunity to adjust to change in order to benefit from it.
Words to live by indeed.
In the background of the OpenAI saga, France, Germany and Italy have pushed back on restrictions to the development of foundation AI models, putting at risk the future of the EU AI Act.
Since this is a newsletter for non-tech people let’s pause a second here to explain what foundational models are.
Simply put, because it’s the explanation I can understand, foundation models are AI systems capable of a range of general tasks from text synthesis, image manipulation and audio generation, such as ChatGPT and Google Bard. But foundation models can also act as the foundation -hence the name- for other applications that can be built on top of them. However, any issues present at the basis of the model will impact the subsequent applications derived from it.
It is therefore important to regulate these models to limit potential risks from the applications built on top of them and reproducing any outstanding problems. Given the many potential uses for foundational models, regulation is not a simple task, and it’s important to make a clear distinction between types of models and their capabilities, and to recognise the unique features of foundation models that may require additional regulatory attention.
If we add to these that large language models are a moving target for any regulator, due to the speed with which they evolve, you can see why the question of regulation is full of holes and grey areas. Some have argued that it may be more practical and attainable to seek agreement on high-quality, standardised and open-sourced datasets to train foundation models.
Among those leading the opposition to the EU AI act there are some familiar names, such as French company MistralAI, which argues that too much regulation and focus on safety will prevent EU companies to be globablly competitive against US AI giants. And by competitive read profitable coming from a company that raised a record VC round a month after its set up.
If you thought the OpenAI drama was over and done with, think twice.
It has just been the tip of the iceberg on the profit over safety question that is at the core of the future of AI and the debate about regulation.
While most people agree on the importance of ensuring the safe development of AI without limiting the potential it may have for good -and one recent example is the recent discovery of new minerals thanks to the use of AI- the reality is that AI is the train no one wants to miss as there is a lot to be gained by boarding it, the sooner and faster, the better.
The pushback from three of the largest EU economies against the EU Act could result in a watered down legislation that may put business insterest before people safety, as Time magazine warns. It’s no coincidence that France and Germany have both expressed their doubts on the EU Act in order to protect their shining AI stars Mistral and Aleph Alpha, which raised $500 million in series B funding in early November.
That’s why sometimes the irony of some headlines is lost amidst the noise.
For instance, this week the Financial Times has reported that high-flying City workers are the most likely to be affected by AI, according to a study by the Department for Education’s Unit for Future Skills. Management consulting tops the occupation most affected by any type of AI application, followed by financial managers, accountants, psychologists, economists and lawyers.
In other words: when someone at a big four in the city of London is advising a company to implement AI for efficiency and increased productivity, they’re cancelling their own job.
As Italians would say “Boh”
While we leave policy makers to carry on the conversation on how much regulation is enough regulation to guarantee safety development of AI without hindering its potential for good, Meta has disbanded its responsible AI team, sending most of its members to its generative AI product team.
And as reported last week, Amazon is consolidating its position as a serious competitor in the AI race and with good reason. The company has introduced Q, a chatbot for companies, as well as its own its own AI-powered image generator at its recent AWS re:Invent conference.
This side of the pond there are also interesting tech announcements via London-based VC firm Atomico, which has presented its annual State of European Tech report earlier in the week at the Slush conference in Helsinki.
The findings show that overall funding for European venture-backed companies is projected to decline 45% in 2023 from a year ago.
However, Europe is the only territory where those numbers have actually risen by 18% from 2020 levels. In contrast, the expected $120bn in funding for 2023 in the US is a 1% down from 2020. Likewise, the predictions for China and the rest of the world are also expected to drop by 7% and 8%, respectively.
The report also highlights that Europe founders have outpaced the US in terms of number of new startups over the past five years. More interestingly, Europe also attacts more US talent than it loses to the country and European tech has expanded its workforce from 1m employees to more than 2m over the past five years.
And before we wrap up, a reminder of an upcoming online event on AI for Creative Industries that will take place on Monday 4th at 2:30 pm GMT and which will be co-hosted as part of the World Cities Culture Summit for public viewing.
The session will be hosted by Justine Simmons, Deputy Mayor for Culture and the Creative Industries and Founder and Chair of World Cities Culture Forum and will be presented by Linden Walcott-Burton, Culture Policy Officer for the Mayor of London.
You can register here to join this virtual session.
Tech News
US data analytics group Palantir has secured an NHS contract worth £330m to develop a new patient data platform.
X CEO Linda Yaccarino publicly backs Musk after his insults to advertisers that have paused spending on X.
Meanwhile Elon is busy delivering the first Tesla Cybertrucks to customers
As part of their new streaming payment policy Spotify will eliminate payments for songs with less than 1,000 streams.
Farfetch CEO in talks to take the company private after the New York Stock Exchange fiasco.
Creative News
The UK art market directly supported 45,520 jobs and 7,800 businesses in 2023, according to the British Art Market Federation annual report.
Frieze is to sponsor the British pavilion at the next Venice Biennale.
London Mayor Sadiq Khan has rejected plans for a glow-up MSG Sphere in East London.
Videogame spillover technology was worth £1.3 billion in 2021 for non-gaming industries, according to a new report from FTI Consulting and Ukie
London Art Fair is back at the Business Design Centre from 17 to 21 January 2024
Last but not least
Last Saturday 25th November was the International Day for the Elimination of Violence against Women. Unfortunately for many women across the world this is far from becoming a reality.
As I type these lines I’m being reminded of Giulia Cecchetin, a 22 year-old girl that was found dead two weeks ago after her disappearance and that of her boyfried, the killer, had been reported to the authorities. Giulia has become the 105th woman murdered in Italy since the beginning of the year.
With that context it is hardly surprising that There’s Still Tomorrow (C’e ancora domani) the directorial debut by actor Paola Cortellesi, has quickly become an overnight record-breaking film, seen by over 3 million people and grossing over 20€ million since its released at the end of October.
The film premiered at the Rome Film Festival, where it won the Audience prize, the Jury prize and a special mention.
I can’t wait to see it in full, having watched and rewatched every trailer, clip, and backstage video and interview that is available. From the photography to the dialogues and of course the cast, this film is a gem. Plus Netflix is involved in the production so fingers crossed it will be soon available to watch outside Italy. Rest assured I’ll remind you about it when it is.
Have a good weekend!