Can The Development of AI be Effectively Regulated?

International cooperation and enforcement - In our current era of geopolitical tensions, international cooperation is becoming increasingly rare. Moreover, due to each country’s specific cultural and socio-political environment, they have differing attitudes to regulation that reflect these differences. For example, the US has taken an extremely lenient and pro-growth approach, and does not have any comprehensive regulatory framework on a federal level, therefore essentially allowing a free-for-all for tech companies. On the other hand, the EU has stringently regulated AI on matters, prioritising safety and security. With these differing attitudes, stemming from inherent differences based on an economy’s natural resources, population structure and political climate it is extremely difficult for countries to cooperate in such a widespread area on an international level. 

Regulation stifles economic growth  - It can be argued that AI is integral to allowing the global economy to bounce back from the COVID induced recession. AI offers the opportunity to increase productivity, efficiency and innovation, and there are fears that strict regulation may curb this. Banks estimate that Generative AI could increase global GDP as much as 10%, thereby revolutionising the structure of the global economy, moving towards an era propelled by automation and technological advancement. Strict AI regulation will disincentivise companies from investing in AI, therefore limiting its potential for economic growth.

AI is an extremely fast paced area, and therefore it will be extremely difficult to keep up with AI’s development for regulators

Pace - AI is an extremely fast paced area, and therefore it will be extremely difficult to keep up with AI’s development for regulators. The Financial Times states that AI regulation will always lag behind development, legislative processes to pass regulation tend to be lengthy, consisting of multiple stages of scrutiny. Politicians have acknowledged this struggle, and are struggling to understand how to keep up with advancements in this ever growing field.

Effective regulation is integral to ensuring that AI is used safely, and properly leveraged to boost the economy. There are several ways to do this, by global consensus, a pro-growth strategy and increased vigilance. 

Global consensus and globalisation - while countries may have different political and economic climates, there is a widespread consensus that AI must be regulated internationally. Both the EU and China are taking a cautious approach to regulation, and the UK is following in these footsteps. As governments become aware of the issues posed by AI, they seek quick and widespread regulation. In September 2024, 57 nations, including the US and UK signed the first legally binding AI treaty, showing the tangible steps that countries are taking towards effective regulation. 

As governments become aware of the issues posed by AI, they seek quick and widespread regulation.

A pro-growth approach - There is a way to regulate AI while prioritising and fostering growth. For example, the EU has created a tier system based on the level of risk posed by the system, this allows for economic growth without allowing the unfettered proliferation of tech bosses. The UK is taking a ‘pro-innovation’ approach to AI regulation, leveraging it to enhance public services and economic growth. Having regulation which strategically balances safety with growth can lead to effective regulation.

Vigilance - while AI is a fast-growing area, with constant vigilance, it can be effectively regulated. By increasing transparency and ensuring liability, regulators can effectively understand what is going on in the industry and can enforce punishment. A lack of regulation is causing safety and security issues, and by increasing surveillance of companies means that regulators will better understand the systems that they are legislating on and the issues that could arise.