Here’s Why the EU AI Act is Risky

Europe just signed the “ EU AI Act” into law. It’s a sweeping new set of AI regulations.

The rules are vague by design but include banning AIs that pose a “risk to fundamental rights.” AIs used in education and healthcare will face strict oversight.

It’s obvious where this is going: The EU AI Act will lead to the banning of cutting-edge AIs in Europe. We’re already seeing it with Anthropic’s new Claude 3 system, which is blocked here.

AI has the potential to transform our lives. It’s already creating personalized tutors that turn our kids into straight-A students. It’s developing lifesaving drugs at warp-speed, too.

It can also create trillions of dollars in wealth for companies and investors.

But if bureaucrats smother AI in its crib, forget about progress. Innovation will be replaced with endless ethics committees and AI regulations.

These kinds of developments test my optimism. I don’t believe the future will automatically be better than the present. That’s complacency.

I’m optimistic for one specific reason: I believe entrepreneurs and innovators will continue to improve the world, as they have the last 200 years.

The human mind invented ways to pull power from the sun… “delete” diseases from our bodies… make sand “think” (AI chips come from sand)… and put a man on the moon.

Our future can be unrecognizably great, but not if we outlaw innovation with silly rules.

Just look at heavily regulated industries like healthcare and education. Every industry the government touches turns to stone. Progress stagnates, while costs balloon.

Today, we have a small window to fight for AI innovation. If the crackdown takes hold — like with nuclear energy in the ‘70s — it becomes near impossible to undo.

What we should do: Treat AI like the internet.

The web has been the greatest disruptive trend of our lifetimes because the government largely left it alone.

Even when regulators enacted internet laws in the mid-’90s, they took a hands-off approach.

Imagine if politicians had drafted a 500-page “Internet Act” just as the web was ramping up.

You couldn’t have predicted Airbnb (ABNB) or Uber (UBER) in the early ’90s. So, how could you pass laws to regulate them? The “Internet Act” would have enforced some silly rules killing these companies before they were even born.

Time to speak up and fight against AI regulation and this new EU AI act.

References

[1] AI is one of the megatrends I cover in my investing letter The Jolt⚡. If you’re looking for more insights on AI, as well as on other disruptive technologies like robotics, blockchain, EVs, and so on, click here to subscribe. I publish a new Jolt issue every M/W/F.