EU Artificial Intelligence Act: An Examination of Its Implications for Generative AI Technologies

6 mins read


On May 11, the European Parliament passed the EU Artificial Intelligence Act, setting new legal precedents for AI technologies. Notably, this Act has come into focus with the surge in popularity of generative AI tools such as ChatGPT, DALL-E, Google Bard, and Stable Diffusion. The European Commission made some adjustments to the legislation to address these AI systems, which has wide-ranging implications for businesses across the world.

Amendments and the Transparency Requirement

The most significant amendments incorporated new transparency and disclosure mandates for large language models. These models, falling under the category of “general-purpose AI systems,” use extensive datasets and machine learning to comprehend and generate content.

Creators and artists have expressed concerns about these AI systems “stealing” original work due to their training on datasets of publicly available data. This has raised questions about potential infringements on copyrights and lack of proper compensation.

The EU Artificial Intelligence Act attempts to protect creators and copyright holders. But, there may be unintended consequences for American AI firms looking to operate in the European market.

Article 28b 4(c) of the EU AI Act

This particular section of the Act states that providers of generative AI systems must “without prejudice to national or Union legislation on copyright, document and make publicly available a sufficiently detailed summary of the use of training data protected under copyright law.”

This poses a significant challenge due to the scale and diversity of the datasets used in training these AI models. For example, GPT-3 was trained on 45 terabytes of text data, making it impractical to trace specific data segments.

David Holz, founder of MidJourney, underscored this issue, stating, “There isn’t really a way to get a hundred million images and know where they’re coming from.”

The EU AI Act’s new provisions could potentially place AI firms around the world at risk of non-compliance, leading to hefty fines. As such, AI developers need to create strategies to document training data meticulously.

The Potential Implications and Challenges

At first glance, the Act could pave the way for fair compensation to copyright owners and original creators. However, the broad language of the obligations makes it difficult to discern the level of detail required in the summaries.

Moreover, the discrepancies between EU and U.S. copyright laws could result in confusion for companies trying to comply. The EU automatically provides copyright protection to creators, unlike the U.S., where a formal copyright registration process exists.

Moreover, the U.S. Copyright Office has explicitly stated that AI-generated works are not eligible for copyright. This leads to a significant grey area in determining what content is protected under copyright law.

The Increasing Copyright Litigations

AI companies have already faced numerous lawsuits. OpenAI, Microsoft, Github, Stable Diffusion, and MidJourney have all been targeted for copyright violations. The passage of the EU AI Act is likely to exacerbate this trend, leading to more frequent lawsuits with potentially steeper penalties.

As the EU AI Act becomes a reality, American AI companies must begin to carefully study the implications for their own operations. It remains to be seen whether the transparency requirements in the EU AI Act will spur new innovation in efforts to comply. The divergences between EU and U.S. copyright laws do not create a favorable landscape for firms trying to collaborate in both regions, and the latest amendments to the AI Act worsen this dynamic. These looming EU regulations threaten to reshape the very foundation of AI development.

Frequently Asked Questions (FAQ)

What is the EU Artificial Intelligence Act?

The EU Artificial Intelligence Act is a comprehensive piece of legislation enacted by the European Parliament aimed at providing a legal framework for AI technologies within the European Union. Passed on May 11, this Act focuses heavily on generative AI tools, such as ChatGPT, DALL-E, Google Bard, and Stable Diffusion. These AI systems have seen a tremendous surge in popularity in recent times, leading to significant scrutiny and the need for legal guidelines to ensure their responsible and ethical use.

What are the new transparency and disclosure requirements?

The Act mandates that providers of generative AI systems must document and make publicly available a detailed summary of the use of training data protected under copyright law. This measure is designed to ensure that the vast datasets used to train these AI models, which often contain copyrighted content, are handled with transparency and respect for the original copyright holders. However, the Act’s language leaves room for interpretation regarding the exact level of detail required in these summaries, which has led to some uncertainty among stakeholders.

How does the Act affect American AI firms?

The EU Artificial Intelligence Act could potentially impact American AI firms that operate in the European market. The Act’s transparency and disclosure requirements mean these firms need to meticulously document the datasets used to train their AI models. Given the vast scale and diversity of these datasets, this can be a daunting and resource-intensive task. Failing to comply with these requirements could lead to significant fines, posing a risk to these firms’ financial stability and overall operations.

What are the implications for copyright holders?

The Act aims to protect creators and copyright holders by requiring AI firms to be transparent about the use of copyrighted materials in training their AI models. This could pave the way for fair compensation for creators whose works are used in this context. However, the specifics of how this will be implemented are yet to be clearly defined. The lack of clarity could potentially result in confusion and unnecessary lawsuits if companies are over-inclusive in their summaries or if copyright holders are unsure of whether their works have been used.

How does the EU AI Act relate to copyright laws in the EU and the U.S.?

The Act exposes the differences between copyright laws in the EU and the U.S. In the EU, copyright protection is automatically given to creators upon the creation of their works, while the U.S. requires a formal registration process for copyright protection. Furthermore, the U.S. has explicitly stated that AI-generated works are not eligible for copyright. This disparity creates a complex situation for AI firms, particularly those operating in both regions, as they must navigate two distinct legal frameworks when it comes to copyrighted material.

Will this lead to more copyright litigations?

Given the Act’s emphasis on copyright protection and the disclosure of copyrighted material used in training AI models, it is highly likely that we will see an increase in copyright litigations. Companies that have already faced lawsuits for copyright violations, such as OpenAI, Microsoft, Github, Stable Diffusion, and MidJourney, may find themselves under increased scrutiny. The potential for hefty fines under the Act could also incentivize more copyright holders to take legal action if they suspect their works have been used without proper compensation or acknowledgement.

How can American AI firms comply with the Act’s requirements?

Compliance with the EU Artificial Intelligence Act requires American AI firms operating in the European market to carefully review and analyze their data collection and usage practices. They need to devise strategies to document the training data used in their AI models, ensuring transparency and adherence to copyright regulations. Implementing robust data tracking and recording mechanisms, along with comprehensive documentation of the data sources and associated copyright information, can help these firms demonstrate compliance with the Act’s requirements.

Are there potential challenges in implementing the transparency requirements?

Yes, there are challenges associated with implementing the transparency requirements outlined in the Act. The sheer volume and diversity of the training datasets used by generative AI models, such as ChatGPT and DALL-E, make it difficult to trace and identify specific copyrighted segments or content. The lack of a centralized registry or database for copyrighted works further complicates the process. As a result, AI firms may face practical limitations in providing the level of detail required in the summaries, which can potentially lead to ambiguity and legal uncertainties.

What are the consequences of non-compliance with the Act?

Non-compliance with the EU Artificial Intelligence Act can have significant consequences for AI firms. The Act empowers regulatory authorities to impose fines of up to 30 million euros or 6 percent of the firm’s annual revenue turnover, whichever is greater. These penalties can have a severe financial impact on companies, potentially leading to reputational damage and operational challenges. To avoid such consequences, AI firms must prioritize compliance and take proactive steps to meet the Act’s transparency and disclosure requirements.

How can the EU and U.S. copyright law discrepancies be reconciled?

Reconciling the discrepancies between EU and U.S. copyright laws requires careful consideration and potential reforms. Harmonizing copyright regulations at an international level could promote consistency and clarity for AI firms operating across jurisdictions. Collaborative efforts between the EU and the U.S., including dialogue and the exchange of best practices, can help bridge the gap and establish a more coherent framework for copyright protection in the context of AI-generated content.

Will the EU AI Act hinder innovation in the AI industry?

The EU AI Act’s transparency requirements may pose challenges for AI firms and potentially slow down innovation in the industry. The onus on providing detailed summaries of training data, combined with the potential legal risks and compliance costs, may discourage companies from pursuing research and development in generative AI technologies. However, it is also an opportunity for AI developers to explore alternative methods of intentional and careful data collection, ensuring both compliance and continued innovation in a responsible manner.

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