EU smart contract regulations receive mixed responses

EU to introduce new copyright rules for AI

The European Union (EU) has been crafting a new legislative framework that would dramatically strengthen restrictions governing the research and application of artificial intelligence. The proposed Artificial Intelligence (AI) Act focuses largely on improving data quality, openness, human supervision, and accountability. It also intends to address ethical issues and implementation obstacles in a variety of areas, including healthcare, education, finance, and energy.

Legislators in the European Union responded to the increasing use of AI in a vote on April 27 by advancing the drafting of a new bill aimed to keep the technology and corporations creating it in control. The bill’s details will be finalised in the following phase of legislative and member-state negotiations. 

“[AI] has been around for decades but has reached new capacities fueled by computing power. The Artificial Intelligence Act aims to “strengthen Europe's position as a global hub of excellence in AI from the lab to the market, ensure that AI in Europe respects our values and rules, and harness the potential of AI for industrial use.”

Thierry Breton, the EU’s Commissioner for Internal Market

However, as things stand, AI tools will soon be classified based on their risk level. The danger levels vary from minimal to limited, high, and unacceptable. The measure states that high-risk instruments would not be completely prohibited, but will be subjected to stronger disclosure standards. Generated AI tools, such as ChatGPT and Midjourney, will be required to report any usage of copyrighted resources in AI training.

The demand to reveal copyrighted material used to construct AI systems was a late addition to the plan. Initially, some committee members recommended outright prohibiting the use of copyrighted content in the training of generative AI models. But this was dropped in favour of a transparency requirement. A European Parliament member, Svenja Hahn, stated that the agreement struck by parliament will govern AI proportionally, safeguard individuals’ rights, stimulate innovation, and benefit the economy.

“Against conservative wishes for more surveillance and leftist fantasies of over-regulation, parliament found a solid compromise that would regulate AI proportionately, protect citizens’ rights, as well as foster innovation and boost the economy,” said Hahn.

In the same week, Eurofi, a European think tank comprised of public and private sector firms. It also launched the current edition of its magazine, which included an entire section on AI and machine learning applications in finance in the EU. The section comprised five mini-essays on AI innovation and regulation in the EU. There was a focus on uses within the financial sector, all of which alluded to the future Artificial Intelligence Act.