The EU Commission recently proposed a new set of stringent rules to regulate AI, citing an urgent need. With the global race to regulate AI officially on, the EU published a detailed proposal on how AI should be regulated, explicitly banning some uses and defining those it considers “high-risk,” planning to ban the use of AI that threatens people’s rights and safety.

We can all agree with the sentiment of Margrethe Vestager, the European Commission executive vice president, when she said that when it comes to “artificial intelligence, trust is a must, not a nice to have,” but is regulation the most effective and efficient way to secure this reality?

The takeaways from the commission are incredibly in-depth, but the ones that make the most sense to me are those that stress regulated AI should aim to increase human well-being. However, regulation should not overly constrain experimentation and development of AI systems.

High-risk AI systems should always have unalterable built-in human oversight and control mechanisms. AI systems intended to interact with people or to generate content, whether high-risk or not, should be subject to specific transparency obligations. In addition, AI-based remote biometric systems in publicly accessible places shall be only authorized by EU or member state law and serve the objective of preventing, detecting or investigating serious crime and terrorism.
Partnership between AI and humanity

The set of laws and legal framework enacted in Europe will have a profound impact on AI regulation around the world, similar to the effects the GDPR regulations created over the past decade. But will these laws assist us in moving away from the EU-wide haphazard regulatory approach toward a singularity of common classification?

In my opinion, this will cripple AI development in the EU while China and the United States leap forward. It would limit the use cases and innovation of artificial intelligence and put the EU in a technologically inferior position globally. In the U.S, AI is being optimized to maximize corporate profitability and efficiency. In China, AI is being optimized to maximize the government’s grip on the population with the preservation of power. The overly regulated environment in the EU will lead to complete chaos when regulations in various EU bodies start contradicting.
Negative effects on EU entrepreneurship

A lack of investment in AI in the EU is a major factor why the EU is losing the AI race to the U.S. and China. There are currently about 446 million people living in the EU and 331 million people living in the U.S. But in the EU, $2 billion was invested in AI in 2020, while in the U.S., $23.6 billion was invested.

If the EU continues pushing with aggressive regulations and lack of funding, it will enjoy global leadership in AI regulations, but I won’t be surprised if many European entrepreneurs decide to launch their startups in more AI-friendly countries.

In turn, other nations will take advantage of the EU’s push toward strict regulations by fostering innovation and generating a stronger hold on the future of global technology. A recent World Bank report showed the EU launched 38% of investigations into data compliance in 2019, compared to only 12% in North America. With policies this stringent and burdensome to companies, it should be no surprise if innovators and entrepreneurs begin to move to more business-friendly parts of the globe.
Regulation leads to relegation

The regulation proposal suggests fines of up to €20 million, or up to 4% of total annual turnover of the AI provider for noncompliance. If we consider prior EU legislation and subsequent lack of digital innovation, these proposed regulations will cause chronic stagnation of digital innovation and adoption in the EU bloc.

In short, if these regulations become law, the EU will not become a pioneer but a laggard. The “real” use cases of AI are yet to emerge, uncovering the true potential of AI. The massive bureaucracy for high-risk use cases will undercut any entrepreneurship or bottom-up innovation efforts. With historical markers trending to the EU heading to a recession, now is not the time to stifle innovation.
Put a human face on global AI … and show its value

If AI is to be broadly accepted, we need a human face showing AI helping people solve their problems and challenges. We must highlight engaging stories that are true and showcase the real people behind them. For the population at large to accept the potential of AI, they must see people like themselves benefiting from the goodness of AI.

AI funding means, above all, startup funding. Startups form the bridge between the discovery and development of disruptive technologies to their everyday use by the general public. Europe is already doing a significant amount of planning, but must accelerate.

European venture capital is lagging behind the U.S. model. Fast-growing startups are mostly dependent on American and Asian investors. This requires a rethinking of the investment culture and sensible promotion of a dynamic investment environment; for example, through the targeted relaxation of investment restrictions on the part of institutional investors.

We’re living during the age of “moonshots,” a time when entrepreneurs and scientists are able to go further than ever before. Competing in the next economy requires playing a new innovation game, one whose goal is to boost innovation tenfold.

In order to reach this level, incremental optimizations do not help. The focus needs to pivot to big innovations — moonshots. Taking risk is acceptable and implementation of a large and risky idea should become normal.

To create an EU that is friendly to innovation and entrepreneurs, we must create a collaborative network of AI pioneers to lead the way. Entrepreneurs and data science leaders must use their energies to focus on AI for good to improve the world in the longer term and advocate for deregulation. To accomplish this, we need to set up a global AI pioneers council on AI for good, consisting of participants from leading research institutions, businesses, the public sector and civil society to develop a shared understanding of best practices.

AI is no longer just a tool for optimizing corporate systems and societal infrastructures; its potential reaches much further into solving the various crises facing mankind, from climate change to uncontrolled pandemics. Responsible AI and AI for good application across all the world’s superpowers can address these crises.

The EU cannot afford to be the region of the globe disincentivizing innovation and discouraging entrepreneurship. The EU must move not toward super regulation, but toward strategic leadership of AI based on AI for good. The path of overregulation leads to the depths of stagnation. It is up to the EU to decide what it wants its future to look like.