China’s proposed regulations on generative AI have undergone some recent changes in its latest version of guidelines released by the Cyberspace Administration of China, the country’s top internet watchdog. These regulations, expected to take effect on August 15th, will begin regulating China’s nascent AI industry and make it one of the first countries to do so.
Major Chinese internet companies such as Alibaba, Baidu, and JD have already announced their own AI bots to compete with OpenAI’s ChatGPT, showcasing the significance of this industry. The initial draft of China’s AI guidelines stated fines ranging from 10,000 to 100,000 yuan for non-compliance. However, the latest version removed the language on fines altogether!
Another change in the guidelines is the exemption of generative AI technology developed solely for use outside of China from the regulations. This demonstrates a foreign-targeted relaxation of China’s initial proposed restrictions. Furthermore, the previous draft emphasized that generative AI service providers must guarantee the authenticity, accuracy, objectivity, and diversity of the data. In the latest version, the language was refined to the providers being required to take effective measures to improve the quality of training data and enhance its authenticity, accuracy, objectivity, and diversity.
While some rules have been revised or removed, certain aspects have remained constant. Providers of generative AI services will still need to undergo a security assessment, and AI tools must adhere to socialist values. These regulations highlight how countries like China are striving to establish a balance between AI innovation and control.
The significance of China’s approach to AI regulation can be seen in the context of the technology rivalry between the United States and China. In 2022, US-based AI startups attracted five times more funding than their Chinese counterparts, indicating the importance of fostering domestic development for China. By creating more flexible government rules, China aims to boost its own AI industry.
Many proposed AI regulations around the world, including the EU’s AI Act, remain uncertain. This situation poses challenges for businesses, especially startups, as they navigate the complexities of building AI products. Overly restrictive regulations can increase the cost of innovation, driving startups to consider relocating to countries with more favorable regulatory environments.
The rise of remote work and the interest venture capital funds have shown in non-traditional technology locations outside of Silicon Valley provide startups with greater flexibility to adapt and relocate as needed. Consequently, governments face pressure to establish regulations that strike a balance between fostering innovation and preventing the exodus of startups to more lenient jurisdictions.
China’s evolving AI regulations demonstrate its commitment to both governing the nascent industry and encouraging development. By making certain revisions to the initial draft, such as removing fines and exempting foreign-focused generative AI technology, China is seeking to find a balance between AI’s state control and its lucrative innovation.
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